Abstract
In this paper, we present the processes of public debt development in Kosovo for the period of its functioning, respectively from 2009 until 2018. There is no long history of it, but there is a dynamic constant growth. The methodology used in this paper is based on empirical study analysis, and the scientific literature we have elaborated has found that many thinkers who support public debt with arguments justify this non-fiscal instrument to finance the budget deficit as well as some others who object it. In addition to the international debt with 42% share, in 2012, the domestic debt began to function, with securities issuing at 58%. Along with the country's economic growth, we have also increased budget, and GDP growth. While every year we have an average economic growth of 3.2% to 3.5%. In 2013, compared to 2012, the budget increase is 1.96%, in 2016 compared to 2015 is 7%. In 2017 compared to 2016 we have a growth of 8.31%. In 2009, the debt-to-GDP ratio had a share of 6.12%, in 2014 it reached 10.65%, in 2017 the share of debt to GDP (GDP) was 16.63% and in Q3 of 2018 it was 16.92 %. In the countries of the region and the European Union we have different levels. Most states have a high level of debt to GDP.The study of the literature review was carried out using selected four databases containing publications. Research has been done to find out how much the public debt level is based on the specifics of the economy and fiscal policy in Kosovo. In addition to the dynamics of public finance development, public debt has also been realized.
Highlights
Public debt encompasses all the liabilities that are debt instruments owed by governments and public administrations, public companies and other economic subjects of nations (Barro, 1979)
Well-known researchers: Cukiierman and Meltzer (1989) regarding deficit, developed the theory of debt redistribution. They point out that the growth of the deficit and the expected rate of economic growth are based on the distribution of income with a tendency to increase the population's longevity, and the heirs will lead to large budget deficits (Hung, Derek; Chiat, Chen 2003)
The only country in the world that since 1980 does not receive financial resources on behalf of public debt is Singapore that in the public finance science circles is a case study. In this context, repeated debates are held that support it, it is argued that public debt is of great importance in stabilizing the budget, deficit financing and economic development
Summary
Public debt encompasses all the liabilities that are debt instruments owed by governments and public administrations, public companies and other economic subjects of nations (Barro, 1979). The argument that accumulation of public debt (fiscal deterioration) has a negative impact on economic growth was made in the studies by Reinhart et al that concern public debt overhang (Reinhart, Reinhart and Rogoff, 2012, and Reinhart and Rogoff, 2010). Reinhart, Reinhart and Rogoff (2012) reviewed 26 cases of high accumulation of public debt in advanced countries and reported that in 23 of those cases, economic growth remained stagnant for more than a decade. Well-known researchers: Cukiierman and Meltzer (1989) regarding deficit, developed the theory of debt redistribution They point out that the growth of the deficit and the expected rate of economic growth are based on the distribution of income with a tendency to increase the population's longevity, and the heirs will lead to large budget deficits (Hung, Derek; Chiat, Chen 2003). If the state desires to ensure compliance with the given law to the fullest, the total amount of debt should not exceed the 40% of GDP (Trenovski, B., Tamara M.-S., 2018)
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
