PUBLIC DEBT AND ECONOMIC GROWTH – THE CASE OF THE REPUBLIC OF NORTH MACEDONIA

Establishing and maintaining macroeconomic stability and fiscal discipline on the one hand, and stimulating economic activity, by enhancing the quality of public finances, increasing capital expenditures, and enhancing competitiveness in the Macedonian economy, on the other hand, are two opposing objectives that should be pursued by policymakers. Government borrowing, especially foreign borrowing, is an important source of fixed assets to cover public expenditure. However, the sustainability of public debt depends not only on the level of public debt, but also on the structure and successful implementation of policies to boost economic growth. Borrowing for a country with low economic potential and a constant shortage of capital is inevitable, especially external borrowing. However, the structure, purpose of the assets and their multiplier effect on the overall economy are the main criteria for assessing the impact of public debt on the economy. This paper attempts to apply the econometric VAR analysis to examine the correlation and causal relationship between public debt and economic growth rate of the case of the Republic of North Macedonia for the period 2002 - 2017. The variables to be analyzed are: GDP growth per capita, Public debt as a proportion of GDP, Gross Domestic Investment, Interest Rate and Government Spending. For the purpose of this analysis, a Granger causality test has been conducted. The test results indicate that the impact of public debt growth in North Macedonia does not have a significant impact on GDP growth per capita. The other test that is being conducted is a Vector Error Correction Model which shows that public debt is negatively correlated with short run and long run economic growth.

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The Impact of Foreign Aid on Economic Growth in Ethiopia

International Studies Review ◽

10.1163/2667078x-01302004 ◽

2012 ◽

Vol 13 (2) ◽

pp. 87-112

Author(s):

Mohammed Seid Hussen ◽

Kye Woo Lee

Keyword(s):

Economic Growth ◽

Foreign Aid ◽

Positive Impact ◽

Aid Effectiveness ◽

Gdp Growth ◽

Domestic Investment ◽

Per Capita Gdp ◽

Democratic Regimes ◽

Per Capita ◽

The Impact

This paper investigates the impact of foreign aid on investment and economic growth of Ethiopia for the period 1971-2010. The result indicates that foreign aid has a statistically significant positive impact on domestic investment, while aid’s positive impact on per capita GDP growth does not depend on any macroeconomic policy conditionality. Rather, aid effectiveness depends on the peculiar social, political and economic institutions of particular periods. Aid is effective during both socialist and democratic regimes. However, aid’s impact on growth was greater for socialist regimes.

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The Impact of Public Debt on Economic Growth in Ukraine

Annales Universitatis Mariae Curie-Skłodowska sectio H Oeconomia ◽

10.17951/h.2019.53.4.91-100 ◽

2019 ◽

Vol 53 (4) ◽

pp. 91

Author(s):

Iryna Kondrat ◽

Olena Pozniakova ◽

Oksana Chervinska

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Public Debt ◽

The State ◽

Gdp Per Capita ◽

Gdp Growth ◽

The Public ◽

Per Capita ◽

The Impact ◽

The Relationship

Theoretical background: The growth in government borrowing, carried out in connection with the banks’ capitalisation, significantly increased the state budget expenditures aimed at servicing the capitalisation domestic public debt, which reinforces the general tendency regarding the exacerbation of the budget risk in the debt sphere in Ukraine. A weighty debt-creating factor was the budget deficit, which was covered by borrowing. Proceeding ahead of the rate of increase in debt volumes in comparison with gross domestic product (GDP) growth rates under the influence of internal and external destabilising factors contributed to the excess of the debt levels security indicators and increased the insolvency risk of the state. The increase of the obligations share denominated in foreign currency or linked to the exchange rate in the overall debt structure as an important indicator of the financial system’s vulnerability to exchange rate fluctuations creates additional threats to debt sustainability regarding the increasing currency risk and the national currency devaluation.Purpose of the article: The article is focused on studying the dynamics and structure of Ukraine’s public debt, its ratio to GDP, and an empirical analysis of the relationship between public debt (external and domestic) and economic growth in Ukraine.Research methods: To empirically test the relationship between public debt and economic growth in Ukraine over the 1992 to 2018 period, multiple regression models were conducted. A real GDP per capita was used as an indicator for economic growth and the debt-to-GDP ratio was used as an index of public debt. Research hypotheses were the following: H1: The public external debt-to-GDP ratio and GDP per capita have a strong negative and statistically relevant correlation; H2: The public domestic debt-to-GDP ratio and GDP per capita have a strong negative and statistically relevant correlation.Main findings: Examining the dynamics and structure of Ukraine’s public debt by borrowing market (external and domestic), it is concluded that there is no strong negative or positive statistically relevant correlation between the public debt-to-GDP ratio and GDP per capita for Ukraine. The impact of this factor is so insignificant that it encourages further research to verify that low GDP growth rate causes the increase in Ukraine’s public debt.

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THE CONTRIBUTION OF MIGRATION TO ECONOMIC GROWTH: THE EXAMPLE OF THE CITY OF ZAGREB

EMC Review - Časopis za ekonomiju - APEIRON ◽

10.7251/emc2101201m ◽

2021 ◽

Vol 21 (1) ◽

Author(s):

Vinko Miličević ◽

Danijel Knežević ◽

Zoran Bubaš

Keyword(s):

Economic Growth ◽

European Union ◽

Economic Activity ◽

Economic Benefits ◽

Gdp Per Capita ◽

The European Union ◽

Per Capita ◽

The Republic ◽

The Impact ◽

The City

The problems in this paper belong to the field of migration and economy. The connection between migration and the economy has been proven on a global level, and as far as the Republic of Croatia is concerned, it is especially important to observe it through the City of Zagreb, which is the most important migration and economic center in the Republic of Croatia. Also, the accession of the Republic of Croatia to the European Union emphasized the observation and research of this connection because it created the preconditions for freer movement and employment of the population of the Republic of Croatia and the City of Zagreb within the European Union. The aim of this paper is to determine the contribution of migration to the economic growth of the City of Zagreb. The hypothesis presented in the paper is that there is a significant contribution of migration to the economic growth of the City of Zagreb. The disposition of the paper consists of six parts. The introduction explains the relevance of the topic, states the aim of the paper and hypotheses, explains the empirical part, the contribution of the paper and the disposition. The second part of the paper refers to the theoretical framework of the impact of migration on economic growth. The third part of the paper presents the migration processes of the City of Zagreb in the period from 2011 to 2018. The fourth part deals with economic activity in the City of Zagreb in the period from 2011 to 2017. The observed indicators of economic activity in the City of Zagreb are GDP and GDP per capita, and the graph in this part of the paper shows that GDP and GDP per capita in the observed period are higher at the end of the period than at the beginning. The fifth part of the paper refers to the empirical research of the contribution of migration to the economic growth of the City of Zagreb. The empirical part of the paper is based on correlations and regression analyses. This paper proves the hypothesis because the results indicate a significant impact of the variables of total and external migration on the GDP of the City of Zagreb and GDP per capita of the City of Zagreb. Decision-makers in the City of Zagreb can use the results of the research as a basis for maximizing the economic benefits they can get from migration. The conclusion provides an overview of the aim of the work, the results of the research, the limitations, the implications and the recommendations for future research.

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The influence of demographic factors on the economic development of the Azerbaijan: the interconnection problem

Journal of Geography Politics and Society ◽

10.26881/jpgs.2020.2.04 ◽

2020 ◽

Vol 10 (2) ◽

Author(s):

Saleh Nagiyev

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Economic Development ◽

18Th Century ◽

Demographic Factors ◽

Gdp Per Capita ◽

Gdp Growth ◽

World Population ◽

Per Capita ◽

The Impact

Demographic factors have sometimes occupied center-stage in the discussion of the sources of economic growth. In the 18th century, Thomas Malthus made the pessimistic forecast that GDP growth per capita would fall due to a continued rapid increase in world population. There is a straightforward accounting relationship when identifying the sources of economic growth: Growth Rate of GDP = Growth Rate of Population + Growth Rate of GDP per capita, where GDP per capita is simply GDP divided by population. This article examines the interconnection between economic development and the demographic policy of Azerbaijan. The article analyzes various approaches of the impact of demographic factors on the economic development of a country. The following demographic factors have been identified and described as significant for the economic development: fertility dynamics, mortality dynamics, population size and gender and age structure.

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DOES PUBLIC DEBT HAMPER ECONOMIC GROWTH: EVIDENCE FROM EUROPEAN TRANSITIONAL COUNTRIES

Knowledge International Journal ◽

10.35120/kij34051223s ◽

2019 ◽

Vol 34 (5) ◽

pp. 1223-1228

Author(s):

Liza Alili Sulejmani ◽

Armend Ademi

Keyword(s):

Economic Growth ◽

Transition Economies ◽

Public Debt ◽

Fixed Effects ◽

Global Financial Crisis ◽

Fixed Capital Formation ◽

Negative Effect ◽

Per Capita ◽

The Impact ◽

Positive Effect

Lately, there has been an increased interest among policy makers and scholars regarding the nexus between public debt and economic growth, with emphasizes on its effects on transition economies, particularly after the last global financial crisis. This paper tries to investigate the impact of public debt on economic growth in the European transition economies, for the time spin 2000-2016, by using Pooled OLS, Fixed effects, Random effects and Hausman – Taylor Instrumental variable (IV). In addition, results reveal that public debt although has positive effect on per capita growth still is statistically insignificant, whereas debt square has negative effect on per capita GDP growth. Further, gross savings, final consumption and fixed capital formation have positive effect on per capita growth, while government expenditures do not show significant impact. Moreover, such results highlight important implications for fiscal policymakers in these countries in order to foster the economic growth in the context of public debt level.

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Impact of the government size on economic growth in the Western Balkan countries

Journal of Governance and Regulation ◽

10.22495/jgrv11i1art6 ◽

2022 ◽

Vol 11 (1) ◽

pp. 55-63

Author(s):

Roberta Bajrami ◽

Adelina Gashi ◽

Kosovare Ukshini ◽

Donat Rexha

Keyword(s):

Economic Growth ◽

Government Spending ◽

Economic Freedom ◽

Ordinary Least Squares ◽

Government Size ◽

Gdp Growth ◽

Government Consumption ◽

Per Capita ◽

The Government ◽

The Impact

The Keynesian theory states that economic growth is positively affected by government spending, while Classical theory states that economic growth is negatively affected by government spending, as is stated by neoclassical public choice theorists (Nyasha & Odhiambo, 2019). Based on these theories, many authors have carried out research on the impact of economic freedom on economic growth by analyzing various empirical cases. Bergh and Karlsson (2010) with the findings from his paper confirmed that the countries with the highest government size have an elevated growth in the globalization index of KOF and the Fraser Institute’s economic freedom index. The main aim of this paper is to analyze the government size impact on the growth of the economy in the Western Balkan in the time period 2000–2017 according to Fraser Institute’s data, incorporating the following econometric models: fixed and random effects, pooled ordinary least squares (OLS), and Hausman-Taylor IV. With these models, this paper analyzes a government size and its components: government enterprises and investment, government consumption, transfers, and subsidies. The results illustrate a relationship between the size of the government and the growth of the economy in the Western Balkans that is positive. 1% increase in government size affects 0.29% gross domestic product (GDP) growth per capita. According to the Hausman-Taylor instrumental variable, 1% growth of government consumption is affected by 0.69% the decline in GDP per capita. The growth rate of transfers and subsidies affects 0.17% of GDP growth per capita and 1% of government enterprises and investment affects 0.54% GDP growth per capita.

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Foreign Trade Liberalisation and Economic Growth: The Case of the Republic of Srpska

ECONOMICS ◽

10.2478/eoik-2019-0020 ◽

2019 ◽

Vol 7 (2) ◽

pp. 99-108

Author(s):

Goran Popović ◽

Ognjen Erić ◽

Srđa Popović

Keyword(s):

Economic Growth ◽

Regression Analysis ◽

Foreign Trade ◽

Trade Deficit ◽

Trade Liberalisation ◽

Gdp Growth ◽

Total Trade ◽

The Republic ◽

The Impact

Abstract This paper assesses the impact of trade liberalisation on the economic growth of the Republic of Srpska (RS). The aim of the research is to prove the hypothesis that trade liberalisation and export orientation positively impact on GDP growth. RS has characteristically small and open economies. The degree and character of the connections between the observed variables was determined by means of regression analysis. Regression analysis indicates that there is a positive connection between the total trade and GDP growth. Further, there is a marked positive correlation between export and GDP, that is, export growth contributes to GDP growth. Foreign trade deficit stands in a negative correlation with GDP. Lastly, regression analysis points to the connection between the Republic of Srpska economic growth and openness of its economy. However, uncontrolled opening and exposure to foreign competitiveness can also bring about problems which in certain circumstances lead to long-term macroeconomic instability.

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Trade Liberalization and Economic Growth: The Scenario of the MINT Economies

Economy ◽

10.20448/journal.502.2021.82.35.48 ◽

2021 ◽

Vol 8 (2) ◽

pp. 35-48

Author(s):

Innocent U Duru

Keyword(s):

Economic Growth ◽

Gross Domestic Product ◽

Trade Liberalization ◽

Domestic Product ◽

Causality Test ◽

Significance Level ◽

Real Gross Domestic Product ◽

Policy Objectives ◽

Per Capita ◽

The Impact

This study investigated the impact of trade liberalization on economic growth for Mexico, Indonesia, Nigeria and Turkey from 1986 to 2020. The Autoregressive Distributed Lag Bounds approach to cointegration and Toda and Yamamoto causality test were utilized for this study. The long-run results revealed that there is no relationship between trade liberalization and real gross domestic product per capita except for Mexico and in this situation, the significance level was at 10%. The results of the causality test showed that no causality was detected between real gross domestic product per capita and trade liberalization for Mexico and Indonesia. A bidirectional causality between real gross domestic product per capita and trade liberalization was found for Nigeria whereas a unidirectional causality from trade liberalization to real gross domestic product per capita was revealed for Turkey. The no causality results for Mexico and Indonesia means that the policy objectives of trade liberalization and economic growth can be pursued independently in both economies. In addition, the bidirectional causality detected for Nigeria suggests that the policy objectives of trade liberalization and economic growth can be pursued together in Nigeria. Furthermore, the unidirectional causality from trade liberalization to real gross domestic product per capita found for Turkey implies that she employs trade liberalization policies effectively for objectives of economic growth, thus trade liberalization causes economic growth.

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The Impact of Fiscal Policy on the Economic Growth of Jordan

International Journal of Economics and Finance ◽

10.5539/ijef.v10n10p145 ◽

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.

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Is Fiscal Deficit Essential for Stimulating Economic Growth in Developing Economies? Theory and Empirical Evidence from India

Indian Journal of Economics and Development ◽

10.35716/ijed/20294 ◽

2021 ◽

Keyword(s):

Economic Growth ◽

Developing Economies ◽

Negative Impact ◽

Gdp Growth ◽

Fiscal Deficit ◽

Causality Test ◽

Long Run ◽

Integration Test ◽

The Government ◽

The Impact

The primary purpose of this paper was to assess the impact of fiscal deficit on the economic growth of the Indian economy and find out the causality between fiscal deficit and economic growth from 1981-82 to 2019-20. To analyse the long-run relationship between the variables Johansen Co-integration test was used; after verifying the existence of long-run relationship among variables, the Vector Error Correction Model (VECM) was used, and the Granger Causality test was also used for investigating the direction of causality between pair of variables. The findings of the study supported the ideology of classical economists in which they neglected the government intervention for the growth and development of an economy. The results showed that in long run, fiscal deficit had a significant negative impact on economic growth as one percent increase in fiscal deficit demoted the GDP growth rate by 0.075 percent, whereas in the short run, the impact was also found negative, but it was significant only one lag. Simultaneously, there was unidirectional causality found from fiscal deficit to GDP growth.

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