172nd mBank-CASE Seminar Proceedings: The growing public debt and the associated risks

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17 Nov 2022

Fiscal Policies and Growth

mBank – CASE Seminar Proceedings

Marek Dabrowski

Jakub Karnowski

Andrzej Rzońca

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Marek Dabrowski
Expertise:  Background: Current Positions: Previous Positions: Dr Marek Dabrowski is a Non-Resident Scholar at Bruegel, Brussels, Co-founder and Fellow at CASE – Center for Social and Economic Research in Warsaw, and Visiting Professor at the Central European University in Vienna. He was a cofounder of CASE (1991), former Chairman of its Supervisory Council and President … <a href="https://case-research.eu/publications/the-growing-public-debt-and-the-associated-risks/">Continued</a>

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Jakub Karnowski
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Andrzej Rzońca
Professor at the Warsaw School of Economics, with a postdoctoral degree in the economic sciences, Andrzej Rzońca is also a member of supervisory boards of commercial law companies. His positions held to date have included president of the board of the Association of Polish Economists, member of the Monetary Policy Council (third term), chief economist … <a href="https://case-research.eu/publications/the-growing-public-debt-and-the-associated-risks/">Continued</a>

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Author’s articles

The mBank-CASE Seminar Proceedings No. 172 “The growing public debt and the associated risks” consists of two articles: “The increasing risk of sovereign insolvency and a new global financial crisis in the post-COVID-19 era” authored by Marek Dąbrowski, and “Will Poland fall into the debt trap?” authored by Jakub Karnowski and Marek Rzońca.

From the “Introduction” to “The increasing risk of sovereign insolvency and a new global financial crisis in the post-COVID-19 era” authored by Marek Dąbrowski:

“This paper aims to diagnose the fiscal situation in advanced economies (AEs) and its evolution since 2007. Our analysis covers the periods of the global financial crisis (GFC) (2007–2009), a subsequent recovery, and the COVID-19 pandemic (2020–2021).

We start from an overview of the public debt dynamic in AEs since 2007 (Section 1.1.). Then we remind a public debt sustainability equation (Section 1.2.) and discuss whether real interest rates (r) can continue to stay low and lower than the growth rate of real GDP (g) for a more extended period (Section 1.3). Section 1.4. is devoted to fiscal policy risks that may emerge from a short-to-medium time perspective. Section 1.5. discusses the necessity of starting fiscal adjustment as soon as possible and its possible directions. Section 1.6. analyses the risks to global financial stability originating from the unsustainable path of public debt. Section 1.7. focuses on the negative consequences of a large public debt for monetary policy and the central bank’s (CB) independence. Section 1.8. offers short conclusions.”

From the “Introduction” to “Will Poland fall into the debt trap?” authored by Jakub Karnowski and Marek Rzońca:

“The purpose of this work is to analyze the so-called debt trap, including in particular evaluating the risk that the Polish economy will fall into it.

The analysis comprises four parts:

In the first, we present the definition of the debt trap and describe the mechanisms that can lead a country into it;
Next, we point out the characteristics of the Polish economy and economic policy that increase the risk of falling into the debt trap;
In the third section we formulate recommendations for economic policy whose implementation would limit this risk;
The fourth section is a summary.”

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172nd mBank-CASE Seminar Proceedings: The growing public debt and the associated risks

Marek Dabrowski

Articles from this author:

Jakub Karnowski

Articles from this author:

Andrzej Rzońca

Articles from this author:

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