Andreea Stoian

Debt Sustainability Issues in the Central and Eastern European Countries

The aim of this study is to investigate debt sustainability in ten Central and Eastern European countries over 1997-2013. Following Burger (2012), we calculate the stabilized debt using the estimates of a fiscal reaction function for a balanced panel with fixed effects. Comparing the stabilized, the effective debt ratios and the historical averages, we can assess debt sustainability in short and in long run. We find that current debt ratio as of 2015 for Bulgaria and Romania is not sustainable. The debt dynamics of Bulgaria is stable whilst for Romanias case the debt trajectory indicates unstable dynamics. As for historical averages of debt ratios, Bulgaria could encounter debt sustainability issues also in the long run.

Perspectives on Financial, Monetary, and Economic Developments in Eastern Europe

This special issue of Eastern European Economics includes a selection of articles presented at the INFER Workshop on Rethinking Development and Macroeconomic Policy on April 20–21, 2017 in Cluj-Napoca (Romania) and at the 19th INFER Annual Conference at the University of Bordeaux (France) on June 7–9, 2017. These two INFER events brought together academics, practitioners, and public officials for a dialogue on development and macroeconomic policies in the wake of the recent crises. Numerous research presentations on the European countries were given. Some of the presented articles put a specific focus on the Central and Eastern European Countries (CEECs). This special issue entitled “Perspectives on Financial,Monetary, and Economic Developments in Eastern Europe” is composed of five of these articles. They analyze key challenges faced by the CEECs on their way to a deeper European integration in the context of the recent financial and debt crises. Fiscal and monetary

What do European stock markets prefer? Left or right governments?

Purpose - – The purpose of this paper is to examine the influence of the political partisanship of government in charges of returns on the European stock markets. The authors found a large body of research investigating this issue for the case of US stock market but less evidence for the European stock markets. Design/methodology/approach - – The authors employ a panel data model with fixed-effects and an additional dynamic panel model using the bias-corrected LSDV estimator on a data set consisting of monthly and quarterly data. The data range from 2000 to 2010 and cover 20 European Union (EU) countries. The authors test several hypotheses, and run distinct regressions using political, financial, and economic variables. The authors also divide the data set into two sub-samples in order to reveal the distinctions between advanced and emerging economies in the EU. Findings - – The authors find that stock markets perform better under right-wing administrations. The result is consistent for the advanced EU economies, but the authors found no robust evidence in that sense for emerging countries. Additionally, the authors show that European stock market preferences for right/left-wing administrations is not necessarily related to the beliefs about the size of unemployment, inflation, deficit, and/or debt, which opens the field for further research in this area. Originality/value - – The study contributes to existing knowledge. It examines if Wall Street folklore, asserting for many decades that stock markets perform better under right-wing governments, also holds for European stock markets given the distinctions in the political and financial systems between USA and Europe. Moreover, the authors underline the introduction in the analysis of the Central and Eastern European countries.

Suggestions for a New Classification of Fiscal Tools

Abstract The aim of this study is to identify a set of fiscal tools through which fiscal policy can achieve its goals. Any adjustment policy, including fiscal policy, uses a number of tools in order to make an economic intervention. Some of these tools may have an administrative nature, others economic, etc. In this context, the method we use is to identify a list of the fundamental tools of fiscal policy, based on attributes that define the notion of fiscal instrument.