Sustainability of Local Government Sector Debt. Evidence from Monte-Carlo Simulations

2016 ◽  
Vol 14 (1) ◽  
pp. 115-132 ◽  
Author(s):  
Krzysztof Kluza
Keyword(s):  
Monte Carlo ◽  
Interest Rate ◽  
Local Government ◽  
Interest Rates ◽  
Local Governments ◽  
The European Union ◽  
Investment Policies ◽  
Government Sector ◽  
Systemic Problems ◽  
The Impact

The financial standing of local governments across the European Union was strongly affected by the economic crisis. The local government sector conducted vast investment policies reaching 10.2% of all investments in the EU countries in 2010. However, at the same time its indebtedness expanded significantly. The current low interest rate environment makes the sector vulnerable to future interest rate increases. The presented research analyses the impact of several scenarios of interest rate changes in Poland on the local governments’ ability to service their current debt burdens. Simulations are conducted with the Monte Carlo method. Some scenarios indicate a high vulnerability of local governments to adverse changes in market interest rates, but only if they are combined with a reduction of sector’s operating surplus. Such an economic setup may give rise to systemic problems for the whole public sector.

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.

Stress Tests as a Tool to Assess the Risk of Public Expenditure on Debt Servicing Increasing at Local Government Entities

2019 ◽  
Vol 17 (2) ◽  
pp. 205-224
Author(s):  
Marta Postuła ◽  
Miroslaw Czekaj ◽  
Jaroslaw Klepacki
Keyword(s):  
Local Government ◽  
Interest Rates ◽  
Local Governments ◽  
Public Expenditure ◽  
Stress Test ◽  
Stress Tests ◽  
Government Sector ◽  
Development Expenditure ◽  
Low Levels ◽  
The Eu

National and local government's public debt is of special interest to economic sciences. With interest rates in the EU countries now at historically low levels, there is risk of a trend change causing development expenditure to be crowded out from budgets in favour of debt servicing costs. The analysis (stress test) of the sensitivity of debt servicing costs in the local government sector in Poland to an unexpected growth of market interest rates above the values forecasted by the MoF confirms that local governments are exposed to interest rate growth risk, and consequently to the risk of their budgets incurring unplanned expenditure.

FAKTOR DETERMINAN PENYALURAN KREDIT BANK PERSERO

2018 ◽  
Vol 23 (1) ◽  
pp. 60-71
Author(s):  
Wigiyanti Masodah
Keyword(s):  
Interest Rate ◽  
Linear Regression ◽  
Interest Rates ◽  
Regression Models ◽  
Linear Regression Models ◽  
Negative Impacts ◽  
Main Activity ◽  
The Impact ◽  
The Given ◽  
Multiple Linear Regression Models

Offering credit is the main activity of a Bank. There are some considerations when a bank offers credit, that includes Interest Rates, Inflation, and NPL. This study aims to find out the impact of Variable Interest Rates, Inflation variables and NPL variables on credit disbursed. The object in this study is state-owned banks. The method of analysis in this study uses multiple linear regression models. The results of the study have shown that Interest Rates and NPL gave some negative impacts on the given credit. Meanwhile, Inflation variable does not have a significant effect on credit given. Keywords: Interest Rate, Inflation, NPL, offered Credit.

Evolution of e-participation in Greek local government

2021 ◽  
pp. 1-15
Author(s):  
Constantina Costopoulou ◽  
Maria Ntaliani ◽  
Filotheos Ntalianis
Keyword(s):  
Decision Making ◽  
Big Data ◽  
Local Government ◽  
Local Governments ◽  
Local Community ◽  
New Technologies ◽  
Mobile Apps ◽  
Digital Technologies ◽  
Decision Making Processes ◽  
The Impact

Local governments are increasingly developing electronic participation initiatives, expecting citizen involvement in local community affairs. Our objective was to assess e-participation and the extent of its change in local government in Greece. Using content analysis for 325 Greek municipal websites, we assessed e-participation status in 2017 and 2018 and examined the impact of change between these years. The assessment regards two consecutive years since the adoption of digital technologies by municipalities has been rapid. The main findings show that Greek local governments have made significant small- to medium-scale changes, in order to engage citizens and local societies electronically. We conclude that the integration of advanced digital technologies in municipalities remains underdeveloped. We propose that Greek municipalities need to consider incorporating new technologies, such as mobile apps, social media and big data, as well as e-decision making processes, in order to eliminate those obstacles that hinder citizen engagement in local government. Moreover, the COVID-19 outbreak has highlighted the need for enhancing e-participation and policymakers’ coordination through advanced digital technologies.

Volatility integration of gold and crude oil prices with the interest rates in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shailesh Rastogi ◽  
Adesh Doifode ◽  
Jagjeevan Kanoujiya ◽  
Satyendra Pratap Singh
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Interest Rates ◽  
Global Economy ◽  
Spillover Effect ◽  
Price Volatility ◽  
Volatility Spillover ◽  
Content Type ◽  
Crude Oil Prices ◽  
The Impact

PurposeCrude oil, gold and interest rates are some of the key indicators of the health of domestic as well as global economy. The purpose of the study is to find the shock volatility and price volatility effects of gold and crude oil market on interest rates in India.Design/methodology/approachThis study finds the mutual and directional association of the volatility of gold, crude oil and interest rates in India. The bi-variate GARCH models (Diagonal VEC GARCH and BEKK GARCH) are applied on the sample data of gold price, crude oil price and yield (interest rate) gathered from November 30, 2015 to November 16, 2020 (weekly basis) to investigate the volatility association including the volatility spillover effect in the three markets.FindingsThe main findings of the study focus on having a long-term conditional correlation between gold and interest rates, but there is no evidence of volatility spillover from gold and crude oil on the interest rates. The findings of the study are of great importance especially to the policymakers, as they state that the fluctuations in prices of gold and crude oil do not adversely impact the interest rates in India. Therefore, the fluctuations in prices of gold and crude may generally impact the economy, but it has nothing to do with interest rate in particular. This implies that domestic and foreign investments in the country will not be affected by gold and crude oil that are largely driven by interest rates in the country.Practical implicationsGold and crude oil are two very important commodities that have their importance not only for domestic affairs but also for international business. They veritably influence the economy including forex exchange for any nation. In addition to this, the researchers believe the findings will provide insights to policymakers, stakeholders and investors.Originality/valueGold and crude oil undoubtedly influence the exchange rates but their impact on the interest rates in an economy is not definite and remains ambiguous owing to the mixed findings of the studies. The lack of studies related to the impact of gold and crude oil on the interest rates, despite them being essentials for the health of any economy is the main motivation of this study. This study is novel as it investigates the volatility impact of crude oil and gold on interest rates and contributes to the existing literature with its findings.

The impact of the ESA 2010 on statistics of the general government sector

2015 ◽  
Vol 60 (11) ◽  
pp. 1-15
Author(s):  
Olga Leszczyńska-Luberek
Keyword(s):  
The European Union ◽  
Government Sector ◽  
General Government ◽  
European System ◽  
Relationship Of ◽  
The Impact ◽  
Methodological Guidelines ◽  
The Relationship ◽  
Excessive Deficit Procedure

The author presents the importance of the new European System of National and Regional Accounts (ESA 2010) for statistics of the general government sector. She pays particular attention to the development of data for the excessive deficit procedure. The article explains the methodological changes made to the studies in this field parallel to the ESA 2010. It discusses, among others, issues related to defining the deficit and debt of the general government, as well as the determination of a new way registering transfer of liabilities of pension schemes. It also presents the impact of new methodological guidelines for the relationship of deficit and debt to GDP in the Member States of the European Union.

scholarly journals The Impact of Interest Rate Ceilings on Microfinance Industry

2015 ◽  
Vol 2 (2) ◽  
pp. 10
Author(s):  
Ali Saleh Alshebami ◽  
D. M. Khandare
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Low Income ◽  
Secondary Data ◽  
Research Subject ◽  
Access To Credit ◽  
The Poor ◽  
Good Intention ◽  
The Interest Rate ◽  
The Impact

<p>Imposing ceilings on the interest rate has recently become one of the new hottest topics in microfinance industry; various debates have been discussing this issue to know the effect of interest rate ceilings on the supply of credit in particular and on microfinance industry in general. However in spite of the good intention behind these ceilings, there was no absolute result stating that ceilings have really contributed to the improvement or protection of the poor clients, indeed, these ceilings have hurt those low income people instead of helping them, due to these ceilings most of MFIs left the market or reduced their scale due to the inability to continue operating with low interest rate leaving the very poor clients without access to credit. Thus, the purpose of this paper is to review the impact of imposing such ceilings on the interest rates and to find out what alterative solutions can be employed as substitutes for them. This paper is entirely based on the secondary data collected from various records related to microfinance such as microfinance books, official websites and reports, published papers, and other sources related to the research subject.</p>

Conditions and prospects for cooperation between Polish and Ukrainian local governments

2021 ◽  
Vol 19 (4) ◽  
pp. 221-241
Author(s):  
Mariusz W. Sienkiewicz
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Economic Life ◽  
The European Union ◽  
Public Authorities ◽  
The Public ◽  
Political Transformations ◽  
The Social ◽  
Common Goals ◽  
The Eu

The fact that Poland and Ukraine share a border, the convergence of the political goals of the peoples of both countries, and the constant efforts towards the development of democracy and decentralisation of public life determine the need to intensify cooperation in various areas of the functioning of society and the economy. An important sphere of cooperation is the public sector, in particular at the level of local government. The local government cooperation of both countries was already visible at the beginning of the social and political transformations after 1990. The development of this cooperation, with varying results, took place in the 1990s and, to an even greater extent, after Poland’s accession to the European Union. In the last three decades, local and regional communities in Ukraine have become an important partner for Polish local governments, both at the local and regional levels. The local government cooperation that has been implemented is based on the diversification and multidimensionality of forms and models. Some result from legal regulations, while others are based on mutual experiences, previous contacts, and sympathies of public authorities. The aim of the study is to analyse and present the conditions and forms of Polish-Ukrainian local government cooperation. The aim is also to show the barriers to cooperation and to define proposed solutions to improve partner contacts of territorial units. The local government cooperation of the two countries is undoubtedly hindered by the fact that Ukraine is not a member of the EU, and often by mutual misunderstanding and non-acceptance of historical experiences. On the other hand, common goals at different levels of social, public, and economic life are a significant factor motivating parties to increase cooperation and achieve a synergistic effect thanks to it.

Natural Interest Rate: Sraffa Vs. Hayek Debates

2019 ◽  
Vol 2019 (3) ◽  
pp. 3-16
Author(s):  
Aleksandr Kovalev
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Economic Thought ◽  
Business Cycle Theory ◽  
Natural Rate ◽  
Main Method ◽  
Natural Rate Of Interest ◽  
History Of ◽  
The Impact

This article deal with the discussion between F. Hayek and P. Sraffa in the 1930s. This piece of the history of economic thought is not presented in the Russian-speaking literature. The main method is a content analysis. The directions of criticism Hayek’s business cycle theory by Sraffa and the response towards is analyzed in the paper. The author compared the opponents’ approaches to the essence of the equilibrium, to the savings-investments equality, to the possibility to lose capital as a result of malinvestments, to the role of expectations, and to the natural rate of interest. A version was offered for explaining the ineffectiveness of Hayek's answer to the question on the multiplicity of natural interest rates and the reasons why the barter economy has been perceived as theoretical basis of the Hayekian analysis. It is the inaccurate wording of the natural interest rate and the representation the theory within the framework of the equilibrium paradigm. The findings of the research may be applied to analyze the impact of interest rate regulation on the economic.

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