scholarly journals Of Deficits And Debt Service

2011 ◽  
Vol 1 (1) ◽  
pp. 36
Author(s):  
Thomas J. Pierce
Keyword(s):  
Public Debt ◽  
Reagan Administration ◽  
Cost Of Debt ◽  
The Public ◽  
Budgetary Policy ◽  
Deficit Reduction ◽  
Significant Deficit ◽  
The Impact ◽  
Spending Cuts ◽  
Interest Payments

In this paper the impact of federal government budgetary policy on deficits, the public debt and net interest payments during the Reagan Administration is examined. Large deficits are shown to inflate the public debt and increase the annual cost of debt servicing. This rapidly rising net interest burden, combined with political aversion to legislated tax increases and spending cuts, minimizes the possibility of significant deficit reduction and increases the probability that some form of balanced budget rule eventually will be adopted.

scholarly journals Eurobonds: A Quantitative Approach

2016 ◽  
Vol 12 (3) ◽  
Author(s):  
Angelo Baglioni ◽  
Umberto Cherubini
Keyword(s):  
Euro Area ◽  
Public Debt ◽  
Marginal Cost ◽  
Structural Model ◽  
Cash Transfer ◽  
Cost Of Debt ◽  
The Public ◽  
Sovereign Credit Risk ◽  
The Cost ◽  
The Impact

AbstractThe structural model of sovereign credit risk introduced in an earlier paper by the authors is applied here to measure the impact of introducing Eurobonds. Tranching (i. e. splitting the public debt into a senior and a junior tranche) is coupled with a cross-guarantee among eurozone countries and with a cash transfer. We show that Eurobonds can reduce the overall cost of servicing the public debt for some (high debt) countries in the euro area without increasing the cost for other countries. Moreover, they are likely to give governments an incentive to curb their deficits, due to the higher marginal cost of debt.

IMPACT OF GOVERNMENT DEBT ON FINANCIAL SECURITY OF UKRAINE

2017 ◽  
Author(s):  
Olena Pikaliuk ◽  
◽  
Dmitry Kovalenko ◽  
Keyword(s):  
Economic Development ◽  
Public Debt ◽  
Positive Impact ◽  
The State ◽  
Financial Security ◽  
State Budget ◽  
The Public ◽  
Debt Security ◽  
The Stability ◽  
The Impact

One of the main criteria for economic development is the size of the public debt and its dynamics. The article considers the impact of public debt on the financial security of Ukraine. The views of scientists on the essence of public debt and financial security of the state are substantiated. An analysis of the dynamics and structure of public debt of Ukraine for 2014-2019. It is proved that one of the main criteria for economic development is the size of public debt and its dynamics. State budget deficit, attracting and using loans to cover it have led to the formation and significant growth of public debt in Ukraine. The volume of public debt indicates an increase in the debt security of the state, which is a component of financial security. Therefore, the issue of the impact of public debt on the financial security of Ukraine is becoming increasingly relevant. The constant growth and large amounts of debt make it necessary to study it, which will have a positive impact on economic processes that will ensure the stability of the financial system and enhance its security.

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.

The Public Debt of French Local Government

1985 ◽  
Vol 5 (3) ◽  
pp. 387-399 ◽  
Author(s):  
Pierre-Henri Derycke ◽  
Guy Gilbert
Keyword(s):  
Local Government ◽  
Interest Rates ◽  
Public Debt ◽  
Local Governments ◽  
Central Government ◽  
Tight Control ◽  
The Public ◽  
Policy Measures ◽  
The Impact

ABSTRACTAfter a sharp increase, the public debt of French local communities has been stabilized in real terms: its amount reached 54 per cent of total public debt in 1980. In the French institutional framework, local government borrowing policy is under the tight control of central agencies. An econometric model of the borrowing behaviour of local governments since 1965 is presented; it emphasizes the role of internal determinants of local debt (needs for investment, self-financing ability of governments), external constraints (e.g. interest rates and the financial resources of lenders, such as households savings), and finally the impact of macroeconomic policy measures from the central government.

scholarly journals The Risk of Long-Term Financing of Public Investments

2019 ◽  
Vol 2 (2) ◽  
pp. 42
Author(s):  
Krzysztof Jarosiński ◽  
Benedykt Opałka
Keyword(s):  
Public Debt ◽  
Negative Impact ◽  
Capital Expenditure ◽  
Public Investment ◽  
Point Of View ◽  
Risk Category ◽  
Investment Projects ◽  
The Public ◽  
Public Investments ◽  
The Impact

The risk of financing of public investments is a phenomenon that accompanies development processes in a permanent manner. Investments in the public sector are generally characterized by relatively long implementation cycles and involve significant capital expenditure and the necessity of often parallel running a large number of investment projects. In the processes of this type of investment a specific risk category of financing of this type of investment is quite often taken into account, given that such projects are financed mainly from budgetary resources: the state budget and self-government budgets. Economic practice indicates an importance of the proper selection of the method of the financing of new investments and taking into account new funds from various sources. This situation is often the result of a shortage of budgetary resources from which public investments could be financed. There may be difficulties in financing investments resulting from the emergence of a risk of budgetary deficit and the public debt. This risk may have a negative impact on investment decisions and may adversely affect the future course of ongoing investment projects. The purpose of the paper is to undertake studies on the conditions of financing investments from the point of view of the possibility of budget deficit and public debt and the impact of changes in the financial situation on the overall level of risk of public investment. The text is an invitation to undertake a broader discussion on financing public investments in conditions of limited public financial resources.

scholarly journals Public Deficits and Borrowing Costs: The Missing Half of Market Discipline

2001 ◽  
Vol 19 (2) ◽  
pp. 169-190 ◽  
Author(s):  
Friedrich Heinemann ◽  
Viktor Winschel
Keyword(s):  
Interest Rates ◽  
Public Debt ◽  
Market Discipline ◽  
Borrowing Costs ◽  
Budgetary Policy ◽  
Primary Surplus ◽  
Political Economic ◽  
The Impact ◽  
Growth Differential ◽  
Public Deficits

Abstract EMU driven interest rates’ convergence has led to a significant reduction of borrowing costs for some European governments in the second half of the nineties. The paper deals with the possible consequences for deficit behaviour. Although the impact of interest rates on deficits is a crucial element of the market discipline hypothesis, it has widely been neglected in the literature. In the theoretical part, a standard political economic model of budgetary policy (Hettich-Winer) is adapted. It turns out that borrowing costs, measured as the interest-growth-differential, and the level of public debt should be important determinants for public deficits. The econometric part tests these predictions for a panel of OECD countries. The results indicate that there is indeed a significant impact of borrowing costs on the primary surplus. This impact is characterised by a robust asymmetry: Reactions in times of increasing borrowing costs are more pronounced than in times of relaxing conditions.

scholarly journals Evolution of Public Debt in Albania during 1990-2017 and its impact on the Economic Growth

2020 ◽  
Vol 4 (1) ◽  
pp. 59
Author(s):  
Amarda Cano
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Cost Of Debt ◽  
Specific Level ◽  
The Public ◽  
Macroeconomic Indicators ◽  
Level Of Economic Development ◽  
Second Tier ◽  
The Cost ◽  
The Empirical Analysis

Public debt is one of the most important macroeconomic indicators due to its impact on the economy of each country. Literature suggests that the effect varies in each country depending on the level of economic development and situation. Public debt will have a direct impact on a country's economic growth, but there are contrasting opinions amongst economists regarding the use of public debt, particularly in situations of distress and in developing countries. Albania is a country that would be in need of a decrease of the debt/GDP ratio. This can be done through a stimulation of the economy rather than a decrease of the public debt. The empirical analysis shows that the increase on real public debt can negatively influence the GDP, yet, we do not observe a specific level above which the effects worsened. Instead, we notie that whenever the public debt was increasing, the cost of debt would sometimes decrease because the governments substitutes the debt borrowed from second tier banks with debt borrowed from the IMF.

scholarly journals The impact of financing policy on the cost of debt

2021 ◽  
Vol 18 (4) ◽  
pp. 177-189
Author(s):  
Tetiana Konieva
Keyword(s):  
Capital Structure ◽  
Cost Of Debt ◽  
Financing Policy ◽  
Financing Policies ◽  
Conservative Policy ◽  
Industrial Level ◽  
The Cost ◽  
The Impact ◽  
A Company ◽  
Interest Payments

The cost of debt is a key element to define the amount of the regular interest payments of a company and its business value. It is used for indicators that warn of the economic crisis, which is relevant for the countries where most companies are financially dependent on liabilities. The formalized criteria for the types of financing policy, improved procedure for the cost of debt calculation make it possible to reveal policy with the capital structure that minimizes the cost of debt.The study is based on Ukrainian food processing companies for the period 2013–2020. The studied database was distributed by the types of financing policies: 22% of the cases have a conservative policy, 15% – moderate, 26% – aggressive, 37% – super-aggressive. The results show that the highest weighted cost of debt (24.1%) belongs to the conservative policy, which replaces negative equity by the expensive long-term debts, as well as super-aggressive policy (20.8%) with trade payable that is near half of the capital, and long days payable outstanding. A company can reduce the cost of debt relying on non-interest-bearing liabilities and trade payable if its days payable outstanding are kept at the industrial level or below. Moderate and conservative financing policies, which are based on equity and avoid debts, provide the lowest weighted cost of debt: 2.1% and 1.2%.Thus, choosing the desired type of financing policy for the company, it is possible to form a capital structure that will reduce the cost of debt.

David Ricardo on Public Policy: The Question of Motive

1995 ◽  
Vol 17 (1) ◽  
pp. 133-152 ◽  
Author(s):  
Nancy Churchman
Keyword(s):  
Public Debt ◽  
Income Tax ◽  
Napoleonic Wars ◽  
Policy Debate ◽  
The Public ◽  
The Subject ◽  
Military Expenditures ◽  
David Ricardo ◽  
Interest Payments ◽  
Debt Policy

Among the most controversial of David Ricardo's contributions to policy debate was his scheme for the redemption of the public debt by means of a “capital levy,” a one-time tax on the property of the nation. Public debt policy had been the subject of sporadic debate throughout the eighteenth century, but faced increased scrutiny by the time Ricardo came to address the subject. While government revenues were suffering from the repeal of the temporary income tax which had been imposed during the Napoleonic Wars, revenue requirements remained high, as the savings in terms of military expenditures were being offset by the need to make interest payments on a debt which had grown during the latter years of the war. Ricardo's analysis of public debt was not novel; nor was the proposal for a capital levy to achieve its redemption.

Is US grand strategy self-defeating? Deep engagement, military spending and sovereign debt

2016 ◽  
Vol 36 (3) ◽  
pp. 227-247 ◽  
Author(s):  
Carla Norrlof ◽  
William C. Wohlforth
Keyword(s):  
Public Debt ◽  
Sovereign Debt ◽  
Empirical Test ◽  
Military Spending ◽  
Economic Consequences ◽  
Grand Strategy ◽  
Us Military ◽  
The Us ◽  
The Impact ◽  
Interest Payments

Questions regarding the economic consequences of US grand strategy have gained new salience. This article provides an empirical test of the relationship between US military expenditures and public debt and clarifies the real constraints the US faces issuing debt. Neither results from the statistical analysis nor the economic theory of sovereign debt support the retrenchment position regarding the impact of military spending on public debt (1973–2015). Tax cuts are the most significant determinant of debt not military spending, social benefits or interest payments. Evaluating new hypotheses about alternative mechanisms through which military spending may damage the economy remains a priority.

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