External Debt and Fiscal Stability in Ecuador: Econometric Evidence from the 2017–2023 Period
Keywords:
External debt, Fiscal stability, Fiscal sustainability, Public indebtedness, EconometricsAbstract
This study analyzes the evolution of Ecuador's external debt and its impact on fiscal stability during the 2017–2023 period. During this time, total public debt followed an upward trajectory, reaching USD 79.316 billion in 2023, with external debt accounting for 60.3% of the total. Using a quantitative and econometric approach—based on vector autoregression (VAR) models and cointegration analysis—the study examines the relationship between external borrowing, fiscal sustainability, and key macroeconomic indicators.
The results demonstrate that rising debt levels have constrained the government's ability to implement expansionary fiscal policies and increased vulnerability to external shocks. Furthermore, the debt composition reveals a heavy reliance on external financing, which places pressure on the public budget due to debt service obligations and limits fiscal policy space. The conclusions highlight the need for responsible financing strategies that balance public investment needs with fiscal stability. Recommendations include strengthening debt management, diversifying financing sources, enhancing fiscal transparency, and optimizing public spending to reduce reliance on external credit. These findings provide valuable insights for economic policymakers and contribute to the debate regarding the sustainability of Ecuador's debt model.
Downloads
References
Acosta, A. (2019). La deuda eterna: Una historia de crisis y ajustes en América Latina. Siglo XXI Editores.
Babbie, E. (2020). The practice of social research (15.ª ed.). Cengage Learning.
Banco Central del Ecuador. (2023). Boletín estadístico trimestral 2023. https://www.bce.fin.ec
Banco Mundial. (2023). Deuda y financiamiento en América Latina. https://www.worldbank.org
Barro, R. J. (1979). On the determination of the public debt. Journal of Political Economy, 87(5), 940-971. https://doi.org/10.1086/260807
Blanchard, O. (2019). Public debt and low interest rates. American Economic Review, 109(4), 1197-1229. https://doi.org/10.1257/aer.109.4.1197
Comisión Económica para América Latina y el Caribe. (2021). Deuda pública y sostenibilidad fiscal en América Latina. https://www.cepal.org
Comisión Económica para América Latina y el Caribe. (2023). Panorama económico de América Latina 2023. https://www.cepal.org
Creswell, J. W. (2014). Research design: Qualitative, quantitative, and mixed methods approaches (4.ª ed.). SAGE Publications.
Eichengreen, B. (2002). Financial crises and what to do about them. Oxford University Press.
Fondo Monetario Internacional. (2021). Perspectivas económicas: América Latina y el Caribe 2021. https://www.imf.org
Fondo Monetario Internacional. (2023). Informe sobre estabilidad financiera mundial. https://www.imf.org
Friedman, M. (1953). Essays in positive economics. University of Chicago Press.
Gujarati, D. N., & Porter, D. C. (2017). Econometría (6.ª ed.). McGraw-Hill.
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. https://doi.org/10.1016/0165-1889(88)90041-3
Krugman, P. (1988). Financing vs. forgiving a debt overhang. Journal of Development Economics, 29(3), 253-268. https://doi.org/10.1016/0304-3878(88)90044-2
Ministerio de Finanzas del Ecuador. (2022). Informe de deuda pública del Ecuador 2022. https://www.finanzas.gob.ec
Ministerio de Finanzas del Ecuador. (2023). Boletín de finanzas públicas 2023. https://www.finanzas.gob.ec
Popper, K. (1959). The logic of scientific discovery. Hutchinson & Co.
Reinhart, C. M., & Rogoff, K. S. (2010). This time is different: Eight centuries of financial folly. Princeton University Press.
Sachs, J. (2012). The price of civilization: Reawakening American virtue and prosperity. Random House.
Salgado, R. (2018). Historia de la deuda externa en Ecuador: Crisis y reestructuración. FLACSO Ecuador.
Sims, C. A. (1980). Macroeconomics and reality. Econometrica, 48(1), 1-48. https://doi.org/10.2307/1912017
Stiglitz, J. E. (2020). People, power, and profits: Progressive capitalism for an age of discontent. W. W. Norton & Company.
Downloads
Published
Issue
Section
License
Copyright (c) 2023 Kayna Briggitte Escalante Crespin (Autor/a)
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
