6533b82bfe1ef96bd128e138

RESEARCH PRODUCT

Determinants of sub-central European government debt

Nicolas Jannone BellotLeandro García MenéndezMaría Luisa Martí Selva

subject

Economics and EconometricsECONOMIA APLICADAmedia_common.quotation_subjectEuropean regions05 social sciencesDebt-to-GDP ratioGovernment debtMonetary economicsInternational economicsExternal debtDebt0502 economics and businessPer capitaDebt modelInternal debtBusiness050207 economicsDebt levels and flowsGovernment debtFinance050205 econometrics media_commonPublic financePanel data

description

Abstract The aim of this paper is to analyze the determinants of sub-central government debt in Europe (Italy, France, Austria, Germany, Belgium and Spain) through estimation for each State based on corresponding panel data from 1996 to 2010. Furthermore, we estimate the debt model using a joint sample, consolidating conclusions on the most influential variables in terms of public debt. A comparative analysis of institutional frameworks in Europe shows that relationships between central and sub-central tax authorities have common traits, although the extent of change in each country remains unknown. In sum, this study shows that sub-sovereign government budgets are counter-cyclical, that economies of scale are present, which the golden rule of public finance is followed, that population growth and lower per capita financing lead to higher debt levels, and that regions characterized by higher debt/GDP ratios tend to have lower future deficits.

yearjournalcountryeditionlanguage
2017-07-01
10.1016/j.srfe.2017.04.001http://hdl.handle.net/10251/101709