|Title: EUROPEAN UNION PUBLIC DEBT IN THE CONTEXT OF RECENT DEVELOPMENTS|
Alina Georgeta Ailincă
In the context of recent crises at the level of Europe, the public debt also calls into question the need to detect possible adverse effects over time. The increase in public debt may raise the question of the sustainability of this debt. Thus, the article aims to develop an appropriate model to predict, based on time series, the evolution of public debt in the EU27 (implicitly in the euro area and in several countries selected for example). Thus, the paper uses Eurostat quarterly data for gross government debt for the period 2000 q1 to 2021 q1, the forecast being made by 2028 quarter 1. The model is used Box Jenkins ARIMA methodology, comparing the information criteria Akaike, Schwartz and Hannan-Quinn, the ACF (autocorrelation function) and PACF (partial autocorrelation function) correlograms are analyzed, including for ARIMA residues, so as to verify the selected ARIMA model. The appropriate models for the forecast of gross public debt expressed as a percentage of GDP are for the EU – ARIMA (1,1,1), for the Euro Zone – ARIMA (1,1,1), for Romania – ARIMA (1,1,1) for France ARIMA (1,1,10), for Finland ARIMA (4,1,9), for Greece ARIMA (26,1,26). The forecasted developments further suggest for the European Union, the euro area and the analyzed countries (Romania, France, Finland and Greece) the possibilities for a dramatic increase in public debt, requiring a more careful analysis, especially in the context of discussions on debt sustainability.
|Keywords: Public debt forecasting, time series, ARIMA models, PACF.|