Role and impact of public debt in financing budget deficit and economic growth - with special study in Kosovo

In this paper will be discussed the main concepts and trends of the macro-fiscal indicators in economic growth, as well as their importance in the economic development of different countries, with special emphasis in Kosovo. One of the aims of this paper is to define and explain the connection between macroeconomic indicators with specific emphasis: the public debt, budget deficit and inflation on economic growth. In order to analyze this impact of variables in economic growth, the targeted time period of research is the period from 2004 to 2014. While the data taken regarding Kosovo were obtained from the year 2005, due to the fact that earlier the data have been limited because of the developments in which Kosovo went through. The model that best represents the link between macro-fiscal indicators on economic growth is the linear regression as an econometric model. We will have the opportunity to see and interpret these data. The overall results have emerged in accordance with theoretical discussions presented, but this relationship has not turned out to be very strong because the coefficients acquired did not have great explanatory skills for economic phenomena.

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Estimated impact of COVID-19 on the Jordanian economy

Corporate Governance and Sustainability Review ◽

10.22495/cgsrv5i3p3 ◽

2021 ◽

Vol 5 (3) ◽

pp. 34-41

Author(s):

Jameel Aljaloudi

Keyword(s):

Economic Growth ◽

Unemployment Rate ◽

Public Debt ◽

Budget Deficit ◽

International Institutions ◽

Economic Downturn ◽

International Labor Organization ◽

Negative Effects ◽

Poverty And Inequality ◽

The Impact

This study aims to estimate the negative effects of COVID-19 on the Jordanian economy. These effects are expected to coincide with the results of studies carried out by international institutions. For example, the International Labor Organization (ILO) estimated indicate an increase in the number of unemployed to 5.3 million (the “low” scenario) and 24.7 million (the “high” scenario), from a baseline of 188 million in 2019 (ILO, 2020a). Experts from the World Bank and the International Monetary Fund (IMF) confirmed that the global economic downturn (caused by the coronavirus pandemic) is the largest in the past eight decades, which will lead to an increase in poverty and inequality and harm economic growth in the long term. (News 18, 2020). To measure the impact of COVID-19 on the Jordanian economy, the following indicators were adopted: an economic growth, an unemployment rate, a foreign trade (imports and exports), public revenues, public spending, a public debt, and a budget deficit. The study relied on data contained in reports issued by international institutions and official institutions in Jordan. The results indicate a slowdown in the rate of economic growth, an increase in the unemployment rate, a decrease in exports and imports, an increase in the public debt and the budget deficit

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Public Debt Stock, Education-Centric Human Capital and Economic Growth in Nepal

Economic Journal of Development Issues ◽

10.3126/ejdi.v17i1-2.14522 ◽

2016 ◽

pp. 76-104

Author(s):

Madhav Prasad Dahal

Keyword(s):

Economic Growth ◽

Human Capital ◽

Public Debt ◽

Budget Deficit ◽

Time Series Data ◽

Empirical Literature ◽

Series Data ◽

Total Debt ◽

Ardl Approach ◽

Negative Effect

Government borrows from domestic and foreign sources to finance its budget deficit. There are theories and empirical evidence that suggests negative effect of government debt on economic growth. By applying the autoregressive distributive lag (ARDL) approach to co integration on time series data of Nepal spanning over 1975-2014 , this study finds positive and statistically significant effect of total public debt on the GDP of the country. This result contradicts majority of the existing empirical literature. For the positive result we resort to Keynesian view on the effect of public debt in the economy. The total debt-to-GDP ratio of Nepal shows a declining trend. This should have some policy considerations in the conduct of fiscal policy in Nepal. The contribution of education-centric human capital on GDP is found positive as predicted by theory.Economic Journal of Development Issues Vol. 17 & 18 No. 1-2 (2014) Combined Issue, Page: 76-104

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The impact of budget deficit, public debt and education expenditures on economic growth in Poland

Acta Oeconomica ◽

10.1556/032.2021.00003 ◽

2021 ◽

Vol 71 (1) ◽

pp. 59-84

Author(s):

Michał Konopczyński

Keyword(s):

Economic Growth ◽

Fiscal Policy ◽

Public Debt ◽

Budget Deficit ◽

Growth Path ◽

Rapid Improvement ◽

Balanced Growth ◽

Education Expenditures ◽

Balanced Growth Path ◽

The Impact

AbstractThis paper investigates the relationship between economic growth in Poland and a few metrics of fiscal policy: budget deficit relative to GDP, the structure of public debt, education expenditures, and public consumption. We prove that with constant values of parameters of fiscal policy, over time the economy converges to the balanced growth path which is unique and globally asymptotically stable.Having calibrated the model with statistical data, we demonstrate that in the period of 2000–2016 economic growth in Poland was driven primarily by rapid improvement in the level of human capital (at a rate of 5.4% per annum), and secondarily due to the accumulation of capital (2.7% annually). If recent trends in fiscal policy are continued, the Polish economy will converge to the balanced growth path with GDP growing at 3.7%. This rate may be boosted, if fiscal policy is appropriately adjusted, for example by permanent reduction in budget deficit. We also analyse the effects of changes in the financing structure of public debt. Finally, we present several scenarios of increasing public and private spending on education.

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Public Debt and Economic Growth in the European Union. Empirical Investigation

WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS ◽

10.37394/23207.2021.18.21 ◽

2021 ◽

Vol 18 ◽

pp. 199-208

Author(s):

Piotr Misztal

Keyword(s):

Economic Growth ◽

European Union ◽

Economic Development ◽

Public Debt ◽

Budget Deficit ◽

Negative Impact ◽

Foreign Debt ◽

Budget Deficits ◽

The European Union ◽

The Impact

The relatively high sizes of public debts in many of the world's member states have led to frequentdebates concerning the influence of public debt on economic growth. Analyzing economic literature it can beseen, that theoretical and empirical considerations on this topic are divided into three main parties. The firstpart of analyzes is the work of the Keynesians, which emphasizes that the budget deficit as well as the publicdebt positively affects the economic development of the country, mainly through the impact of the budgetexpenditure multiplier. The opposite view on budget deficits and public debt is represented by the neoclassicalschool, who argue that the budget deficit and public debt can have negative impact on economic growth.Conversely, proponents of the Ricardian equivalence concept believe that budget deficits and public debt areneutral for economic growth. These three mentioned above approaches to the budget deficit and public debtproblem have led to many debates at home and abroad about the importance of budget deficit and public debt inthe process of economic growth and economic development of the country. The main objective of the study isto determine the impact of the foreign debt and home debt on economic activity of the country, based on theexample of the 27 member countries of the European Union (without United Kingdom) in the period 2006-2017. The statistics came from the European Statistical Office (Eurostat) and International Monetary Funddatabase (World Economic Outlook).

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Public debt in Nepal: an assessment

Economic Journal of Development Issues ◽

10.3126/ejdi.v15i1-2.11864 ◽

2015 ◽

pp. 50-59

Author(s):

Kumar Bhattarai

Keyword(s):

Economic Growth ◽

Public Debt ◽

Budget Deficit ◽

Descriptive Analysis ◽

High Rate ◽

Government Budget ◽

Size Of Government ◽

Macroeconomic Indicators ◽

Average Share ◽

Low Rate

Public debt is the instrument of financing budget deficit. One important macroeconomic problem of Nepalese economy is prevailing resource gap. Due to such situation, with the increase in size of government budget, the size of public debt is also increasing. With the increase in public debt, it is worthwhile to study how macroeconomic indicators are changing over the time. This study is based on the descriptive analysis. For this purpose, the period of 1975/76-2010/11 is considered. In this period, public debt has increased, on average, by 18.86%. The share of external loan, on average, seems to be relatively higher, i.e. 58.85% whereas such share of internal loan is 41.15%. However, in the latter period, the share of internal loan has significantly higher than the share of external loan. For example, during the period of 2005/06-2010/11, the average share of internal loan is 68.01% whereas such share of external loan is 31.99%. In spite of increased budget and increased public debt, the growth rate of economy is relatively low. On average, it is 4.28%. But, the rate of inflation is, on average, 8.31%. Thus, Nepalese economy is facing the problem of low rate of economic growth and high rate of inflation.DOI: http://dx.doi.org/10.3126/ejdi.v15i1-2.11864Economic Journal of Development Issues Vol. 15 & 16 No. 1-2, pp. 50-59

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Infrastructure mortgage in Russia: Opportunities and prospects

Voprosy Ekonomiki ◽

10.32609/0042-8736-2019-2-114-133 ◽

2019 ◽

pp. 114-133

Author(s):

G. I. Idrisov ◽

Y. Yu. Ponomarev

Keyword(s):

Federal Government ◽

Public Debt ◽

Budget Deficit ◽

Expert Assessment ◽

Inflation Expectations ◽

Direct Impact ◽

Long Run ◽

Gdp Growth Rate ◽

Negative Effect

The article shows that depending on the goals pursued by the federal government and the available interbudgetary tools a different design of infrastructure mortgage is preferable. Three variants of such mortgage in Russia are proposed, each of which is better suited for certain types of projects and uses different forms of subsidies. According to our expert assessment the active use of infrastructure mortgage in Russia can increase the average annual GDP growth rate by 0.5 p. p. on the horizon of 5—7 years. In the long run the growth of infrastructure financing through the use of infrastructure mortgage could increase long-term economic growth by 0.9 p. p., which in 20—30 years can add 20—30% of GDP to the economy. However, the change in the structure of budget expenditures in the absence of an increase in the budget deficit and public debt will cause no direct impact on monetary policy. The increase in the deficit and the build-up of public debt will have a negative effect on inflation expectations, which will require monetary tightening for a longer time to stabilize them.

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