| Title |
Stability after Crisis: Changes in Dept Holders / |
| Authors |
Rutkauskas, Virgilijus |
| ISBN |
9786094597428 |
| Full Text |
|
| Is Part of |
Development in Economics: Theory and Practice: 12th International Prof. V. Gronskas Scientific Conference.. VU Kauno humanitarinis fakultetas, 2016. p. 70-82.. ISBN 9786094597428 |
| Keywords [eng] |
Financial stability ; fiscal sustainability ; flow-of-funds analysis ; interconnectedness ; balance sheet approach |
| Abstract [eng] |
In this paper author finds links among changes in private and public debt during and after economic downturn. Financial deepening in years before economic downturn resulted in growth of indebtedness among agents within the economy that sustained afterwards. The European Union has not become less indebted during and after economic meltdown, but the structure of debt holders has changed. The growth of private debt in upturn phase resulted in qualitatively new level of economy. However, in order to sustain the same level after economic downturn public sector was forced to increase its debt. As a result, interactions among financial stability and fiscal sustainability have become more pronounced as monetary financial institutions experienced deleveraging from private sector and increase of leverage from public sector. In this paper financial stability is and fiscal sustainability are analyzed by employing flow-of-funds data that shows balanced interlinkages among real and financial flows. Recent discussions on sovereign debt instability and suggestions to diminish public debt whatever it costs lack appropriate answer who will replace it as flow-of-funds in economy is always in balance. |
| Published |
VU Kauno humanitarinis fakultetas, 2016 |
| Type |
Journal article |
| Language |
English |
| Publication date |
2016 |
