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

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.

scholarly journals The Impact Of Macroeconomic Factors In Economic Growth

2016 ◽  
Vol 12 (7) ◽  
pp. 331 ◽  
Author(s):  
Alush Kryeziu
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Public Debt ◽  
Budget Deficit ◽  
Econometric Model ◽  
Macroeconomic Factors ◽  
The Public ◽  
Time Period ◽  
Macroeconomic Indicators ◽  
The Impact

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.

Estimated impact of COVID-19 on the Jordanian economy

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

scholarly journals Fiscal policy and economic development

2020 ◽  
pp. 153-164
Author(s):  
Mykola Pasichnyi
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Fiscal Policy ◽  
Budget Deficit ◽  
Weight Ratio ◽  
Policy Formation ◽  
Gdp Growth ◽  
Fiscal Consolidation ◽  
Real Gdp ◽  
The Impact

The research subject includes the theoretical basis and mechanisms of fiscal policy formation and realization as an instrument of economic development regulation. The aim of the study is to improve the theoretical and methodological basis of fiscal policy formation and determine the peculiarities of its impact on economic development. Methods. In order to achieve the appropriate tasks, we used a set of methods and approaches, that helped to ensure the conceptual unity of our investigation. The dialectical, systemic and structural approaches, methods of analysis and synthesis, comparison, generalization,economic and mathematical modeling, scientific abstraction are applied. Results. In this paper, we explored the main instruments of fiscal policy, which affect economic development. The experience of advanced counties in fiscal consolidation and stimulus measures during the Great Recession was systemized. Also, the author investigated the budget deficit impact on real GDP growth in OECD countries over the 1981-2017 period. Practical implications. Fiscal policy and instruments of its implementation. Conclusions. The regulation of the tax burden on labor and capital influences the conjuncture of these factors in the market. Fiscal regulation is one of the determining reasons for the migration of labor and financial capital between different regions and countries. Given the multiplicity of combinations of tax bases and rates, the government has significant potential to impact on investment and consumer demand, and real GDP growth. The impact of budget expenditures on aggregate demand should be examined considering the level (ratio to GDP) and different composition structures. It is vital to raise the weight ratio of productive expenditures in the overall structure, which leads to foster economic growth. Particularly important are the special productive expenditures that are directed towards the development of human capital; which include expenditures on education, health care, physical development, R&D. It is crucial to establish a consistent relationship between public spending and the obtained results to form an effective fiscal policy. The budget should be balanced, which requires the implementation of systematic fiscal consolidation measures, and it has been found that the growth of the budget deficit slows down economic growth. The priority of fiscal policy is to reduce the debt burden.

scholarly journals The Effect of Government Consumption and Government Investment as Intervening Variables to Growth in Indonesia

2020 ◽  
Vol 20 (2) ◽  
pp. 193-207
Author(s):  
Suparjito Suparjito ◽  
Julianus Johnny Sarungu ◽  
Albertus Magnus Soesilo ◽  
Bhimo Rizky Samudro ◽  
Erni Ummi Hasanah
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Budget Deficit ◽  
Partial Least Square ◽  
Analysis Tool ◽  
Government Investment ◽  
Government Consumption ◽  
The Government ◽  
Investment Spending ◽  
The Impact

Fiscal policy and monetary policy are the two macroeconomic policies used by the government and monetary authorities in order to create a stable economy. The budget deficit policy is one form of fiscal policy implemented by the government in order to realize a high level of economic growth, a controlled inflation rate and open up new job opportunities to reduce unemployment. The impact of the implementation of the budget deficit policy on the level of economic growth is a long debate. Neoclassical groups argue that the implementation of budget deficit policies is detrimental to the economy, as it lowers the rate of economic growth. Keynesian groups argue that the implementation of the budget deficit policy is very good for the economy, because it triggers the rate of economic growth by increasing the number of demand for goods and services through increased government spending. While the Richardian people argue that the implementation of budget deficit policy has no effect on the economy. The data used in this study is data from 1981-2014 which consists of budget deficit, government consumption, government investment and economic growth rate. The method of analysis in this research is using Partial Least Square-Path Modeling (PLS-PM) approach with SMART-PLS analysis tool which aims to analyze the direct and indirect influence of the implementation of budget deficit policy toward the level of economic growth through government consumption and government investment. The results show that the implementation of the budget deficit policy can increase economic growth through increased government investment spending. Keywords: budget deficits, government investment, government consumption, growth.

scholarly journals The Impact of Fiscal Policy on the Economic Growth of Jordan

2018 ◽  
Vol 10 (10) ◽  
pp. 145
Author(s):  
Abdullah Ali Al-Masaeed ◽  
Evgeny Tsaregorodtsev
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Least Squares ◽  
Public Debt ◽  
Least Squares Method ◽  
Government Expenditure ◽  
Gdp Growth ◽  
The Impact

The present study examined the impact of fiscal policy measured by (Government expenditure, Government revenues, internal public debt, external public debt) in addition to exports and inflation factors on the Jordanian GDP growth for the period 1990-2010. The study used multiple linear regression and least squares method (OLS) to test the study hypotheses. The study found that government expenditure, exports and government revenues has a positive and significant impact on the Jordanian GDP growth, and negative and significant impact on the Jordanian GDP growth. The study found that external public debt has a negative but not significant impact on the Jordanian GDP growth.

scholarly journals Public Debt, Economic Growth and Fiscal Balance: Alternative Measures of Sustainability in the Indian Context

2018 ◽  
Vol 21 (3) ◽  
pp. 780-799
Author(s):  
Joydeb Sasmal ◽  
Ritwik Sasmal
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Public Debt ◽  
Indian Context ◽  
Increase With Increase ◽  
Fiscal Balance ◽  
Short Run ◽  
The Government ◽  
Net National Product ◽  
The Impact

This article has examined the impact of public expenditure on economic growth and viability of fiscal policy when the deficit in budget is financed by public borrowing. A number of alternative criteria have been used as indicators of solvency in fiscal balance. The study is based on the theoretical framework and supported by the results of time series analysis in the Indian context. It is found that the share of revenue expenditure (RE) of the government has significantly increased over time and many of the components of RE are non-developmental in nature. The article argues that if growth suffers, it will put adverse impact on fiscal balance. The ratio of gross fiscal deficit (GFD) to net national product (NNP) and growth of NNP are co-integrated, and the ratio is found to increase with increase in NNP indicating deterioration in fiscal balance. The increase in total expenditure of the government has caused rise of the ratio of revenue deficit to total spending. Interest payment on public debt has led to the increase of the ratio of GFD to income. These results are indicators of non-viability of fiscal policy in India at least in the short run.

The model of endogenous economic growth with a balance

2015 ◽  
Vol 8 (2) ◽  
pp. 29-34
Author(s):  
Полев ◽  
V. Polev ◽  
Стародубцев ◽  
Viktor Starodubtsev ◽  
Свистов ◽  
...  
Keyword(s):  
Economic Growth ◽  
Endogenous Growth ◽  
The State ◽  
Discount Factor ◽  
Growth Path ◽  
Stationary Equilibrium ◽  
Balanced Growth ◽  
Endogenous Economic Growth ◽  
Balanced Growth Path

In this paper, we propose a model of endogenous growth, based on the assumption that the discount factor is formed endogenously. Analysis of the model is limited to the study of the state of stationary equilibrium, which correspond to the balanced growth path, and it is shown that the set of stationary equilibria is a continuum, and each individual is uncertain balance

Economic Growth, Public Debt and Welfare: Comparing Three Budgetary Rules

2011 ◽  
Vol 12 (2) ◽  
pp. 205-222 ◽  
Author(s):  
Alfred Greiner
Keyword(s):  
Public Debt ◽  
Public Spending ◽  
Budget Constraint ◽  
Growth Path ◽  
Balanced Growth ◽  
Long Run ◽  
Endogenous Growth Model ◽  
Balanced Growth Path ◽  
Balanced Budget ◽  
Elastic Labor Supply

Abstract We present an endogenous growth model with externalities of capital and elastic labor supply where we allow for public debt and welfare-enhancing public spending. We analyze different debt policies as regards convergence to a balanced growth path and their effects on long-run growth and welfare. Three budgetary rules are considered: the balanced budget rule, a budgetary rule where debt grows in the long run but at a rate lower than the balanced growth rate and a rule where public debt grows at the same rate as all other economic variables but where it guarantees that the intertemporal budget constraint is fulfilled.

GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&D

2013 ◽  
Vol 17 (7) ◽  
pp. 1438-1466 ◽  
Author(s):  
Pedro Mazeda Gil ◽  
Paulo Brito ◽  
Oscar Afonso
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Firm Dynamics ◽  
Growth Path ◽  
Economic Growth Rate ◽  
Balanced Growth ◽  
Composition Effects ◽  
Endogenous Growth Model ◽  
Balanced Growth Path ◽  
Empirical Growth

A negative or nonsignificant empirical correlation between aggregate R&D intensity and the economic growth rate is a well-known fact in the empirical growth literature, but scarcely addressed in the theoretical growth literature. This paper develops an endogenous-growth~model that explores the interrelation~between horizontal and vertical R&D under a lab-equipment specification that is consistent with that stylized fact. A key feature is that the growth rate is fully endogenous both on the intensive and on the extensive margin. Strong composition effects between horizontal and vertical R&D, along both transition and the balanced-growth path, then emerge as the main mechanism producing those results. This setting also allows us to obtain a relationship between economic growth and firm dynamics that is consistent with the empirical facts.

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

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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