A classical German view of public debt and investment in Romania and other ex-socialist economies

Abstract

The article uses the angle, and it is placed under the influence of the contributions of the representatives of German classical financial economic school, from Carl Dietzel and Lorenz von Stein to Adolph Wagner, whose works, reassessed by Carl-Ludwig Holtfrerich in 2013, are comparable, through their originality, to the English and other European classical schools of economics. The section devoted to the literature review is based on the contributions of the three German economists; the section devoted to method critically analyses the ratio of public debt to GDP, highlighting both the positive aspects of this convergence indicator, and its negative sides, as a relative indicator constructed from comparing two completely different statistical indicators, i.e. stock and flow. The results and discussions focus on the evolution, over the last two decades, of the debt in Romania and other ex-socialist economies, emphasising the need to prioritise the quality of debt management through the agency of the investment factor derived from the overall impact of public debt, and the final conclusions emphasise the need for relativisation of thresholds, taking into account the behaviour of the economies analysed, placing relative emphasis on the case of Romania.