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Challenges and Vulnerabilities on Public Finance Sustainability. A Romanian Case Study

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Faculty of Law and Administrative Sciences, Stefan cel Mare University of Suceava, 13 Universităţii, 720229 Suceava, Romania
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Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 11 Carol I, 700506 Iaşi, Romania
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Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2018, 11(3), 55; https://doi.org/10.3390/jrfm11030055
Received: 2 August 2018 / Revised: 11 September 2018 / Accepted: 14 September 2018 / Published: 17 September 2018
(This article belongs to the Section Sustainable Finance)
Given the contradiction between the current demands for sustainability and the way that the financial system works, this paper explored in a retrospective and a prospective view, Romanian Public Finance Sustainability, highlighting the major challenges and vulnerabilities. Relating to the retrospective part, we concentrated mainly on empirical tests on Romanian government solvency between the period 1990–2020, by applying un it root and co-integration tests. To gain a better, general understanding of the behavior of policy-makers, in the second part we used a scenario analysis of budgetary adjustment in the short and medium run under alternative hypotheses. The results provided formal proof that policy makers decisions face critical and complex questions, and the way in which they manage fiscal stimuli has a direct implication on the sustainability of the country and on the lax implementation of fiscal policy. View Full-Text
Keywords: public finance; macro-economic variables; Johansen test; fiscal sustainability; reforms process public finance; macro-economic variables; Johansen test; fiscal sustainability; reforms process
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Bostan, I.; Toderașcu, C.; Gavriluţă (Vatamanu), A.F. Challenges and Vulnerabilities on Public Finance Sustainability. A Romanian Case Study. J. Risk Financial Manag. 2018, 11, 55.

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