Determinants of Public Debt Dynamics in Transition and Post-Transition Economies

This article examines the dynamics of general government debt across 27 transition and post-transition countries spanning from 1996 to 2019. We devise and assess a theoretical model incorporating key determinants shaping the trajectory of public debt. Our evaluation employs panel data models. The findings underscore inflation, GDP growth, and nominal exchange rate as primary influencers of public debt. However, the significance of the exchange rate diminishes, displaying negative signs, when excluding post-transition euro area countries from analysis.