Izvorni znanstveni članak

https://doi.org/10.3326/pse.50.3.1

Government debt dynamics in the EU after the pandemic: the role of the snowball effect

Mislav Brkić ; Croatian National Bank, Zagreb, Croatia *

* Dopisni autor.

Sažetak

The COVID-19 pandemic and the subsequent economic recovery had a strong impact on government debt dynamics in the EU. This paper focuses on fiscal developments in the period 2021-2023, when the economic crisis triggered by the pandemic had already passed. In particular, it aims to determine whether the rapid reduction in government debt ratios in that period was driven by member states’ primary surpluses or a favourable snowball effect – the positive difference between member states’ nominal growth rates and the average interest rates on their debt. The analysis clearly reveals that the snowball effect was the key factor behind the favourable trend in debt ratios. The paper also discusses the challenges and adverse shocks that the EU faced in the post-pandemic period, which put pressure on national budgets and thus contributed to the persistence of primary deficits in that period.

Ključne riječi

pandemic; inflation; fiscal policy; government debt

Hrčak ID:

350848

URI

https://hrcak.srce.hr/350848

Datum izdavanja:

7.9.2026.

Posjeta: 0 *