Internal public debt and economic growth: the case study of Ukraine
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DOIhttp://dx.doi.org/10.21511/pmf.06(4).2017.03
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Article InfoVolume 6 2017, Issue #4, pp. 23-32
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The paper addresses an estimation of public debt-to-GDP threshold ratio in the developing economy encountered with an excessive public debt impact on macro dynamics. An active field of the study focuses on the internal public debt due to a recent tendency of external share substitution in the developing economies. Among a lot of publications dedicated to the public debt, the study object usually focuses on an array of countries using the same method to evaluate the threshold ratio. Analyzing behavior specifics concerning economy in crises and thereafter, there is a need to carry out the public debt study for the particular economy as well. The research suggests an algorithm for determining internal public debt-to-GDP threshold ratio by applying a scenario modeling tool. Taking into account a growing burden of public debt in Ukraine, the authors have elaborated an econometric macro model operated through fiscal-monetary interaction. The model was used to evaluate the internal public debt-to-GDP threshold ratio in Ukraine. The threshold ratio proves to be 40% of GDP, while the similar result for the total amount of public borrowings is about twice as high. Although the given ratio remained below the estimated threshold as of the mid-term of 2017, a space degree is small and going to collapse soon. Considering sluggish economic recovery following the last recession took place in 2014–2015, Ukraine will face the challenge of reopening the agenda of growing debt burden in a near future.
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JEL Classification (Paper profile tab)H68, C32, C63
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References14
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Tables1
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Figures5
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- Figure 1. The comparative dynamics of GDP and the ratio of broad money (M2) to internal public debt (Dint)
- Figure 2. The block diagram of fiscal-monetary interaction model
- Figure 3. The dynamics of Domestic Government Bonds in circulation (DGB)
- Figure 4. The correlation between Domestic Government Bonds in circulation (DGB) and broad money (M2), Q1 2005–Q2 2017 (bln. UAH)
- Figure 5. The comparative GDP dynamics based on actual data (Actual) and modeling results (Baseline)
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- Table 1. The scenario verification of the threshold ratio, (Q1 2008‒Q4 2013)
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Government debt management: challenges and perspectives
Rostyslav Slav’yuk
,
Nataliia Slaviuk
doi: http://dx.doi.org/10.21511/imfi.15(3).2018.12
Investment Management and Financial Innovations Volume 15, 2018 Issue #3 pp. 143-156 Views: 2350 Downloads: 528 TO CITE АНОТАЦІЯThe article examines the current tendencies of the government indebtedness in the world. It proves the rapid growth of the government debt in the different countries around the world after the 2008–2009 financial crisis and analyzes the reasons for government debt increase in particular countries and its consequences. The study is devoted to the research of the government debt in developed and developing countries. Particular attention is paid to the government debt of Japan, the USA, the European Union countries. In the article, the government debt of Ukraine, its tendencies, and consequences for the economy are analyzed. The state borrowings in Ukraine are often used for financing the servicing and payment of the existing debt. Government debt can be an important investment source and used for the development of the economies. But in the conditions of its rapid and unlimited growth, government indebtedness can be a burden for the economy.
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State’s debt sustainability management: case of Ukraine
Fedir Zhuravka ,
Hanna Filatova ,
Oleksandr Podmarov ,
Khaled Aldiwani ,
Fathi Shukairi
doi: http://dx.doi.org/10.21511/pmf.07(4).2018.01
Public and Municipal Finance Volume 7, 2018 issue #4 pp. 1-7 Views: 1540 Downloads: 129 TO CITE АНОТАЦІЯNowadays one of the relevant problems of economic development of Ukraine is the excessive increasing of the public debt that has a number of negative consequences for the financial system of the country. The article is devoted to the research of state’s debt sustainability concept. Special attention is paid to the development of an effective system of debt sustainability management. The aim of the article is to study the theoretical bases of the state’s debt sustainability, investigate scientific and methodological approaches to its management, analyze the public debt and debt sustainability of Ukraine. In order to achieve that goal, the following scientific methods were used: analysis and generalization, decomposition analysis, comparison and compilation. The authors analyzed the structure of the debt sustainability management system: objects, subjects, key principles, objectives, methods, instruments, etc. The list of key indicators of debt sustainability was substantiated and the authors compared their normative values in Ukraine and in world practice. Besides, the state and structure of public debt and the ratio of government debt to GDP were scrutinized. The obtained results proved the debt crisis deepening in Ukraine.
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The impact of fiscal councils on the budgetary consolidation
Public and Municipal Finance Volume 6, 2017 Issue #1 pp. 15-23 Views: 837 Downloads: 108 TO CITE АНОТАЦІЯFiscal councils are independent institutions that play an important role in execution of fiscal rules and budgetary discipline through their realistic and unbiased macroeconomic and budgetary analysis and projections. It is important that the fiscal councils have easy access to the media to ensure that their analyses reach the wider public, and influence creators of fiscal policy. This paper analyzes the influence of fiscal councils on budget balance and public debt in period before and after financial crisis. The member states that had functioning fiscal councils before the financial crisis, on average, manage their public finances better than those who founded them after the beginning of crisis. Additionally, supervision of the enforcements of fiscal rules from fiscal boards is already showing positive results in this short time period. Fiscal councils are extremely important to ensure a healthy basis for conducting fiscal policy and to decrease the influence of politics on public finance management.
