Average Annual GDP Growth Research Articles

Exploring the impact of auditor industry specialization on income smoothing

Since the late 1970s’ reform and opening-up, China’s economy has achieved remarkable success, maintaining an average annual GDP growth of 9.7% from 1978 to 2006. In 2007, China achieved a GDP of 3.38 trillion USD, surpassing Germany to become the world’s third-largest economy, and by the second quarter of 2010, it had become the second-largest economy globally. These developments have attracted international investors’ attention to Chinese equities. However, China’s poor reputation for corporate governance may deter investors, despite their positive outlook on China’s economy. Corporate managers in China are known to engage in income smoothing, taking actions to dampen fluctuations in their firms’ publicly reported net income. In 2004, the OECD proposed that a strong disclosure regime promoting real transparency can help attract capital and maintain confidence in the capital market, with income smoothing being a key concern for both institutional and individual investors. This study investigates how auditor industry specialization (AIS) affects income smoothing behavior in Chinese listed companies. Using a sample of 27,208 firm-year observations from 2006 to 2018 collected from the Taiwan Economic Journal Database, the results indicate that AIS is negatively related to managers’ income smoothing behavior, underscoring the importance of industry expertise in mitigating such practices. Additionally, an independent t-test highlights the difference between Big Four and non-Big Four auditors in influencing client companies’ income smoothing behaviors. The study further demonstrates the significant moderating effect of Big Four auditors on the relationship between accounting firms with top industry expertise and client companies’ income smoothing, reflecting the unique characteristics of the Chinese market. This study verifies the suppressive effect of AIS on firms’ income smoothing and indirectly suggests that governments (or the Chinese Institute of Certified Public Accountants, CICPA) should regularly disclose accounting firms/auditors with industry expertise publicly. This regime can help global investors make informed investment decisions.

The Impact Analysis of Bauxite Downstreaming on the Indonesian Economy: Case Study in PT Bintan Alumina Indonesia

This research analyzes the impact of investment and bauxite downstream activities by PT Bintan Alumina Indonesia (PT BAI) on the Indonesian economy using the input-output method applied to the Riau Islands Province, West Kalimantan Province and Indonesia. The imposition of stimulus on sectors related to the construction phase and operational phase of the alumina and aluminum industry in the Galang Batang SEZ is the concept that underlies how final demand in other sectors is affected. Economic improvement is characterized by increased output, GDRP, people's income, and the creation of job opportunities. During the construction phase of PT BAI (2016-2029), it generally had a positive impact on the increase in output, income, average GRDP, and average job creation in 52 industrial sectors in the Riau Islands Province. During the operational phase, calculated through three scenarios applied to the Riau Islands Province, West Kalimantan, and Indonesia, with the assumption of full downstreaming of PT BAI's products into the domestic market, shows the greatest impact. The impact includes the increase of Indonesia's output value until 2030 reaching IDR 547.07 trillion, an average annual GDP growth of 0.099 percent, a national income increases until 2030 reaching IDR 74.22 trillion, and an average job creation of 107,105 people per year in 52 industrial sectors in Indonesia. To achieve the optimal target of PT Bintan Alumina Indonesia's (BAI) presence in the domestic bauxite value chain, strengthening the downstream process and downstream industries of alumina and aluminum domestically is needed. Fiscal incentives, the establishment of pro-downstream regulations, and investor protection are crucial to implement.

Основні вектори розвитку зеленої енергетики в Україні: тарифна політика

The aim of the article is to form a scientific and practical basis for determining the main vectors of development of green energy in Ukraine, related to the definition of tariff policy. According to the results of the carried out study, it is proved that the prospects for the development of the world energy sector and the associated threats of irreversible negative impact on the environment are among the most pressing problems of the globalization process. All countries of the world are faced with the practical task of changing the paradigm of development, changing the system of basic ideological foundations for the use of industrial energy and «transparency» of resource management that meet the requirements of open and transparent activities based on innovative and progressive knowledge and technologies. All this requires the development of alternatives that will ensure the transition of world economies to sustainable development. Programs for the development of renewable and alternative energy sources are formed and implemented in almost all developed countries. However, the unresolved number of methodological issues regarding the introduction of renewable and alternative energy sources, the lack of relevant experience, the insufficient development of the regulatory framework at all levels and bureaucratic obstacles hinder the introduction of renewable and alternative energy sources in Ukraine, which justifies the relevance of this study. The article states that the problems of renewable energy development are discussed at different institutional levels. The constant threat of a crisis in the supply of oil, the threats associated with the development of nuclear energy, and the concern of modern society about environmental, and therefore climate problems, have led to the emergence of modern energy policy, the purpose of which is to create renewable green energy without greenhouse gas emissions into the atmosphere. The most important role for the sustainable development of the world economy be played by energy, which is the basis for the functioning of the economy and society and should ensure the growth of the world’s population and economic development with an average annual GDP growth rate.

Socio-Economic Development of Tibet in the 9th Five-Year Plan (1996–2000). Part 7

The results of the realization of the 9th Five-Year Plan of the PRC turned out to be the closest to those planned since the beginning of the economic reform. China successfully overcame the inflationary processes of the late 1980s and early 1990s. There was a smooth transition from extensive to intensive economic growth. China's average annual GDP growth has exceeded 8 %. The Asian crisis of 1997 was overcome successfully and painlessly. Just then 3 years earlier than planned, there was a 4-fold increase in GDP per capita compared to 1980. The country has taken second place in the world after Japan in terms of gold and foreign exchange reserves. Instead of destructive inflation, signs of deflation appeared in the economy. Trade deficit has gone to the irretrievable past. The transport infrastructure has been noticeably improved. The standard of living has risen significantly. Science and education developed rapidly. The socialist market economy progressed harmoniously. Great success has been made in the cultural sphere. Hong Kong and Macau returned to the bosom of the Motherland. The TAR economy developed at a faster pace than the country. However, Tibet remained an underdeveloped region of China, despite major achievements in all areas.

Transformation of the economy of post-communist Georgia on the 30th anniversary of the restoration of independence

30-year period of economic transformation in Georgia took place with certain difficulties; the first 10 years were especially painful, when the absolute annual decrease of the gross domestic product amounted to 1.5 billion GEL. The annual average decline of GDP was 8.91%. In the second and third decades, the situation improved to some extent, however, due to the difficulties caused in the first decade, the annual average absolute growth rate for the entire 30 years was 114 million GEL, and the average annual GDP growth rate was 0.4%. The successes achieved in the economy of Georgia in recent years  is not unnoticed by the International Monetary Fund and the World Bank, which considered Georgia to be the most successful country in the post-Soviet space in terms of economic reforms. The results could have been better in terms of successful cohabitation, which is delayed in Georgia.  According to the last time periods, the growth of the GDP of Georgia is characterized by a double-digit rate.

The Russian economy: Borders of growth

The purpose of this article is to predict the likely dynamics of Russia’s GDP and consumption fund for 15 years, based solely on highly aggregated characteristics of investment activity—the savings rate and the incremental capital−output ratio. Hypotheses regarding investment parameters are formed with account for their values and trends during the retrospective period 2001–2020. The results of forecast calculations show that there is a fundamental possibility to ensure the average annual GDP growth rate for the period up to 2035 at approximately 3%. This will require serious investments to increase the savings rate to 26−27% in three to four years, at the same time significantly improving the quality of the investment resource and the return on additional capital, and to begin forming a production apparatus on a new technological platform.

Housing inequality in relation to housing tenure: Evidence from Ho Chi Minh City

Unfair distribution of social resources, including valuable assets such as housing, leads to inequality and threatens the sustainable development of countries. This phenomenon is a hot issue, attracting the attention of many researchers worldwide. Ho Chi Minh City is considered one of the economic-financial centers of Vietnam, with a high average annual GDP growth rate, rapid urbanization, and the flow of migrant workers to live and work has increased rapidly in recent years. Although many achievements are based on outstanding developments, Ho Chi Minh city has faced many difficulties in housing policy due to the limited urban land fund, colossal population, and housing prices many times higher than the residents’ income. It is shown that there are difficulties in access to affordable housing in Ho Chi Minh City, especially for the population's low- and middle-income segments. This creates inequality and considerable pressure on housing development policy in urban areas. The article uses OLS regression to analyze issues related to housing inequality in Ho Chi Minh City in the relaion to living space and homeownership, then gives some implications for housing policy toward improving the quality of living standards in terms of residential conditions. Research data is taken from a survey of 700 households in Ho Chi Minh City conducted by the author in 2020. The results show that household income, working time, age, education, household size, and a household with small business activity at home affect the household living space area. In addition, these factors have different impacts on families with housing tenure. The author believes that in the future, the government should focus on improving education, providing stable jobs, and planning suitable housing places to ensure equitable distribution of social resources, including housing.

ПРОМЫШЛЕННОЕ ПРОИЗВОДСТВО В СТРАНАХ ЕВРАЗИЙСКОГО ЭКОНОМИЧЕСКОГО СОЮЗА И СОСТОЯНИЕ ВЗАИМНОЙ ТОРГОВЛИ

Identifying the competitive advantages of the EAEU countries within the framework of mutual industrial and production cooperation, leveling emerging problems and searching for new opportunities are important for the active development of the economies of each state, using the existing potential, creating an independent fundamental and sustainable industrial base. According to the official statistics of the Eurasian Economic Commission, the total gross domestic product of the countries of the Eurasian Economic Union for the period from 2017 to 2022. increased by 44%, amounting to 2.6 trillion US dollars. The average annual GDP growth rate of the EAEU countries for the period from 2017 to 2022 amounted to about 1.5%. The highest share of industrial production in the gross domestic product (hereinafter referred to as GDP) in the countries of the Eurasian Economic Union (over 50%) is noted in the Republic of Belarus (88–89%), as well as in the Russian Federation (64%). The average level of industrial specialization in the structure of GDP is noted in Kyrgyzstan (44–46%), in Kazakhstan (42–47%), and also in Armenia (33–32%). On average, in the Eurasian Economic Union, the largest share in industrial production belongs to the manufacturing industry (64–65%), followed by mining (24–27%), electricity, gas, steam and air conditioning (7–9%), as well as water supply (1.7–2.0%). In order to integrate the joint industrial capabilities of the EAEU, to intensify work to create conditions for the development of union cooperation, an industrialization map was created in 2019. In modern conditions, it is necessary to strengthen innovative technological cooperation between the EAEU countries, joint production of machinery, machinery, equipment, increase the production of electrical equipment, metallurgical, leather and footwear, textile, knitwear and food industries in a closed cycle. In addition, it is important to conduct joint scientific research and develop measures to stimulate cooperation, including the creation of joint technological platforms, industrial clusters, the involvement of small and medium-sized businesses, the formation of cooperative chains for the production of joint products based on territorial and geographical opportunities.

The Export of Medium and High-Tech Products Manufactured in Europe

In this article we analyze the determinants and the export trend of European countries of medium and high technology products. The data were analyzed using various econometric models, namely WLS, Pooled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects. The results show that exports of medium and high-tech products are positively associated, among other variables, with the value of “Average Annual GDP Growth”, “Total Entrepreneurial Activity” and “Sales Impacts”, and negatively associated with, among other variables, “Human Resources”, “Government and Procurement of Advanced Technology Products” and “Buyer Sophistication”. A cluster analysis was realized with the k-Means algorithm optimized with the Silhouette coefficient. The result showed the presence of only two clusters. Since this result was considered poorly representative of the industrial complexity of the European Union countries, a further analysis was carried out with the Elbow method. The result showed the presence of 6 clusters with the dominance of Germany and the economies connected to the German economy. In addition, a network analysis was carried out using the distance to Manhattan. Four complex network structures and two simplified network structures were detected. A comparison was then made between 10 machine learning algorithms for predicting the value of exports of medium and high-tech products. The result shows that the best performing algorithm is the SGD. An analysis with Augmented Data-AD was implemented with a comparison between 10 machine learning algorithms for prediction and the result shows that the Linear Regression algorithm is the best predictor. The prediction with the Augmented Data-AD allows to reduce the MAE by about 0.0022131 compared to the prediction with the Original Data-OD.

Динамика производительности труда стран мира и суть четвертой промышленной революции

The third and fourth industrial revolutions are developing on the basis of information technology. The main technologies within the fourth industrial revolution, which began at the turn of the 21st century, are cyberphysical systems, the Internet of things and cloud computing. Any industrial revolution implies a rapid increase in labor productivity. However, in most countries, the average annual growth rate of gross value added per person employed in industry, including energy, has been steadily declining over the past 30 years, and in a number of countries in the 2010s, they were negative. Those states that in the 2000s, accelerated the growth rate of gross value added per employed person compared to the 1990s, in the 2010s they reduced them to a level less than in the 1990s. The average annual GDP growth rate at PPP per hour worked also showed a slowdown in the 21st century. The fourth industrial revolution has as its main consequence increased digital control over citizens and enterprises. In industry and agriculture, a decrease in production volumes and a reduction in employment is predicted. The discourse of the fourth industrial revolution seems to have as its goal the formation of a positive perception of digitalization technologies and total control by humanity.

INCOME AS ONE OF THE WELL-BEING FACTORS OF THE POPULATION OF UKRAINE: CURRENT STATE

INCOME AS ONE OF THE WELL-BEING FACTORS OF THE POPULATION OF UKRAINE: CURRENT STATE

Foreign Capital in Africa: Theories, Strategies and Novations

Historically, foreign capital has played a significantly larger role in the functioning of African economies than in other large developing regions. The past 20 years have been a period of rapid economic growth in Africa, accompanied by a dynamic growth in the continent’s investment attractiveness. The purpose of the article is to provide a political and economic analysis and assessment of the impact of foreign capital on the development of African countries, primarily from the point of view of achieving a difficult balance in their state policy between the interests of overcoming backwardness and ensuring economic growth, on the one hand, and overcoming the rudiments of economic dependence that have persisted since colonial times, on the other. The main attention is paid to the current stage of competition between American, Chinese and European capital in Africa For about thirty years, African countries have been pursuing a policy of encouraging the inflow of private direct investment, which, according to the leadership of these states, should contribute to sustainable growth and diversification of local economies. To a certain extent, these hopes were justified. Average annual GDP growth rates of the continent’s countries in the 21st century turned out to be the highest over long time periods for the entire period of independent development. In addition, there are certain achievements in the field of diversification of African economies and modernization of production facilities, including even the creation of separate facilities and technological production facilities (in South Africa, Kenya, Tanzania). that meet the requirements of the 4th industrial revolution. The negative shifts in the global investment climate stemming from the total sanctions and trade war unleashed by the West seriously complicate the conditions for the development of African countries. Objectively, they lead to a narrowing of the possibilities for attracting foreign capital to their economies and deriving structural advantages from the free use of FDI in their own interests. Prospects for improving the situation, it seems, for African countries today depend more on the possibilities of improving the global situation than on the efforts of national governments to create legal and economic conditions in the domestic capital markets. Otherwise, the decisive factors determining the volume and direction of the inflow of foreign capital to Africa will increasingly be the geopolitical decisions of large external players. The author concludes that at the same time, it is likely that in the medium-and long - term perspective, African countries will not only remain attractive but uneasy market for foreign capital to operate, but will gradually bypass many of the modern investment priority countries and regions in Europe, Asia and Latin America in terms of attractiveness.

ASSESSING LONG-RUN GROWTH PROSPECTS FOR THE UK’S REGIONS

The UK faces a number of economic challenges in the short to medium term. Prior to COVID-19, renegotiation of trading arrangements with the European Union was the most prominent of these. We build on existing macroeconomic analysis by assessing prospects for the UK’s regions generated by combining a global macroeconometric model and a regional computable general equilibrium of the UK. A central macroeconomic scenario shows a national average annual GDP growth rate of 1.7 per cent to 2044. When the macroeconomic scenario is applied across regions, growth rates range from 1.6 per cent for Cambridge to 2.2 per cent for Pembrokeshire; the standard deviation is low at 0.07 per cent and the coefficient of variation is 0.04 per cent. In contrast, much wider variation is observed in the standard deviation for exports (0.36 per cent), investment (0.11 per cent) and consumption (0.14 per cent). The country results favour Scotland, which grows at an annual rate of 1.8 per cent, whereas Wales is the slowest growing of the countries at 1.7 per cent. Consistent with the macroeconomic analysis, international trade is the most important contributor to the regional variation in growth rates. We also analyse the effects of higher government consumption relative to the forecasts and find most regions are predicted to experience lower economic activity except the handful in which government consumption is a much higher share of GDP than average.

Prospects for Economic Growth in Russia

The dynamics of the development of the Russian economy from 2013 to the first half of 2019 is considered. The potential of future economic growth until 2024 is estimated by an average annual GDP growth rate of 4%. The main drivers of growth are the population’s demand for durable goods, postponed due to lower incomes, as well as investments in fixed assets and human capital, the current level and share of which do not meet Russia’s requirements for joining the world’s top five countries by 2024. It is noted that there are reserves of capacities, increasing the intensity of the use of labor resources, and financing R&D and technological upgrades of production to accelerate dynamics and improve the quality of economic growth in the medium and long term. The internal and external constraints and risks of socioeconomic development are discussed briefly. The key role of science as an instrument for risk reduction and effective economic policy as a whole is emphasized.

Low-carbon development strategy of Russia considering the impact on the economy

The article considers the impact of national climate policy on the development of the Russian economy and energy sector. Implementation of an aggressive scenario (which is aimed at containing at any cost the rise in global temperature within 1.5 °C compared to the pre-industrial era) is unacceptable to Russia from socioeconomic perspective given it leads to lowering the average annual GDP growth rate by 1.8 percentage points by 2050. Effective long-term development strategy with low GHG emissions level should focus on structural and technological modernization of the economy; improve the absorption potential of the LULUCF sector; stimulate only those structural changes in the energy sector that involve production and technological chains within the country and do not provide for excessive price growth. Russia retains a significant potential for energy efficiency growth, and the necessary condition for activating this process is sustainable economic growth as it involves modernization of the production facilities and using available and competitive industrial capacities. The implementation of a reasonable scenario, based on these principles, would allow Russia to fulfil the nationally determined contributions within the Paris Agreement while ensuring economic growth at the rate not less than the global average one.

Стратегия низкоуглеродного развития: перспективы для экономики России

As a party to the Paris Agreement Russia pledged not to exceed the net greenhouse gas (GHG) emissions’ level of 70–75% to that existed in 1990. Energy efficiency improvement, structural shifts in production and the increase of Russian forests’ carbon sink capacity were the key contributors to curbing the GHG emissions in Russia during the last 25 years. The decreasing carbon intensity of the GDP was a natural result of economic growth and implementation of voluntary business projects to improve the efficiency of the industrial sector using investments in modernization of the production facilities. Russia disposes significant potential to reduce GHG emissions, but the feasibility and efficiency of respective measures should be evaluated considering the implications to economic growth. Implementation of the socalled aggressive scenario to halt global temperature growth at any cost within 1.5 °C as compared to the pre-industrial era is unacceptable to Russia from socioeconomic perspective given its leading to lowering the average annual GDP growth rate by 1.8 percentage points by 2050. In addition, tough measures to reduce GHG emissions involve energy costs skyrocketing to unprecedented levels – from the current 13% of the GDP to 30% of the GDP by 2040. Such a burden would hardly be compatible with economic growth or, in any case, provide for the economic growth’s providing for improvement of the communities’ standard of living. Russia needs the long-term development strategy with low GHG emissions level focused on improving the quality of living, modernizing and increasing the competitiveness of the national economy. Such a strategy rests on the following principles: 1) Russia has been the world leader in the GHG emissions reduction since 1990, so no solid reason exists for its soonest switching to excessively stringent climate commitments which result in ungrounded additional restrictions to its socio-economic development pace; 2) The core impediment to sustainable development of Russia is not a high level of the GHG emissions, but economic stagnation. Given that the reasonable scenario of the GHG emissions reduction implies the development path that allows the national economy to grow at a rate of 3% average annual GDP as the least; 3) Action priorities in the area of the GHG sinking should involve improvement of the LULUCF sector potential by promoting sound natural resources management policy and voluntary projects to increase carbon sink and reservoir capacity of the forest and wetland ecosystems; 4) Action priorities to reduce GHG emissions assume the imperative and expediency of economic stimulating of the structural change in the energy sector that involves production and technological chains within the country and do not provide for excessive price growth. Such change includes increasing use of natural gas (as the most “clean” fossil fuel) and nuclear energy (given Russia’s leading position in the nuclear technology area), as well as cogeneration of electricity and heat. Pronounced increase in using renewables, energy storage systems and electric vehicles should be acceptable only if production of these is successfully localized and costs are reduced. Sustainable economic growth is a prerequisite for intensifying energy efficiency improvement as it involves modernization of the production facilities and using available and competitive industrial capacities. Specific measures targeted at energy savings will be inefficient given economic stagnation. A reasonable (smart) scenario of the Russia long-term economic development with the low GHG emissions level should comply with the principles above and its driving force propelled by structural and technological modernization of the economy that fully involves economic potential of the energy resource and power sector. The implementation of this development scenario would allow Russia to comply with the Paris Agreement national commitments while ensuring economic growth at the pace not yielding to that of the global average.

Wyzwania rozwojowe w najszybciej rozwijających się krajach azjatyckich

Development challenges in the fastest growing Asian countriesOver the period from 2001 to 2017, 14 countries in Asia recoded an average annual GDP growth rate of more than 6%. The fastest growing Asian countries experienced rapid economic growth as a result of implementing various development strategies. Besides, to a different extent, they used their economic success to improve the standard of living of their citizens. After 17 years of fast economic growth they still face many development challenges. Among them, the most important are: elimination of extreme poverty among employees, reduction of income inequality in society, improving the standard of living and quality of life of citizens especially in rural areas, ensuring a better access to high quality maternal and child health services, and increasing access to social services for the whole society.

Macro-economic analysis of green growth policies: the role of finance and technical progress in Italian green growth

The transition to a low-carbon economy is a complex process that, from a technical perspective, requires coordination of different market players, significant technology advancements and sufficient financial resources. The transition to a low-carbon energy system is a capital intensive process. Different technological options at different scales and different time frames will be required for the successful transition to a low-carbon energy system. The economic impact on countries that transform their energy system depends on a multitude of factors including their energy system profile, the access to low-cost financial resources, whether they are market leaders in the production of clean energy technology and their ability to assimilate knowledge that is produced elsewhere. In this study, we use a large scale applied CGE model to compute the macroeconomic implications of the investments required to reduce by 76% as compared to 1990 levels the GHG emissions of the Italian energy system within a context of global concerted GHG mitigation action. The focus of the analysis has been on the Italian economy and energy system as Italy is both an equipment manufacturer, its energy system is largely based on fossil fuels and its financial system is currently under pressure following the elevation of public debt and deficits. The model-based results suggest that the Italian economy can benefit from the low-carbon transition in the coming decades in case Italian firms and households have access to low-cost financial resources, Italian manufacturers acquire market shares in the production of clean energy technologies and technological progress is rapid driven by innovation and economies of scale. The average annual GDP growth of Italy in the period 2015–2050 can be 1.3% in the case that Italy reduces drastically its GHG emissions and the associated cumulative expenditures sum up to one trillion euro.

Carbon Consumption, the Carbon-Based Ecosystem, and Output

This paper studies the effects of the carbon-based ecosystem on a country's output. We propose and estimate a dynamic game production model in which a country's ecosystem, as measured by its reservoir of carbon in land biomass and soils, is a productive input. This reservoir is diminished when higher levels of greenhouse gas concentrations reduce land sink absorption of atmospheric carbon. In equilibrium, a country's land carbon policy accounts for its direct effects on the ecosystem and on diminished land sink as GHG concentrations increase. We first estimate land sink absorption rates and the output elasticities of land use and the land carbon ecosystem for 152 countries. Calibrating the model to these estimates, we simulate the model to 2100 under four standard Representative Concentration Pathway scenarios. In the simulations, all countries experience higher average annual GDP growth under lower GHG concentration scenarios. The growth differentials between high and low scenarios are starkest for more developed countries. When compared to a counterfactual constant sink model, the ``active sink makes little difference in low concentration scenarios, but decreases global GDP growth by around 1.3% per year over the next 80 years in the highest scenario. Again, the differences are most pronounced in developed countries.

Infrastructure mortgage in Russia: Opportunities and prospects

The article shows that depending on the goals pursued by the federal government and the available interbudgetary tools a different design of infrastructure mortgage is preferable. Three variants of such mortgage in Russia are proposed, each of which is better suited for certain types of projects and uses different forms of subsidies. According to our expert assessment the active use of infrastructure mortgage in Russia can increase the average annual GDP growth rate by 0.5 p. p. on the horizon of 5—7 years. In the long run the growth of infrastructure financing through the use of infrastructure mortgage could increase long-term economic growth by 0.9 p. p., which in 20—30 years can add 20—30% of GDP to the economy. However, the change in the structure of budget expenditures in the absence of an increase in the budget deficit and public debt will cause no direct impact on monetary policy. The increase in the deficit and the build-up of public debt will have a negative effect on inflation expectations, which will require monetary tightening for a longer time to stabilize them.