Public Finance Sustainability: The Case of Romania

Abstract:     
This paper proposes a simple method to assess the sustainability of public finances in Romania, which uses the twin deficits concept. We conclude that the sustainability of the country has been seriously affected by the recent crisis, but to a larger extent by the inappropriate design of economic policies in past years. Budget deficits have been recorded even in times of high economic growth, while foreign debt has accumulated at an unjustifiable increasing speed.

Number of Pages in PDF File: 9

Keywords: Public finance sustainability, foreign debt, twin deficits

JEL Classification: E62, F34, H63, H74

working papers series