Internal Public Debt Research Articles

Measuring and Analysis the Relationship between the Internal Public Debt and the Exchange Rate in the Iraqi Economy for The Period 2004 – 2022

The scholastic view of public religion differed, and this difference was on two extremes. Alleconomic schools agreed that public debt is a monetary liquidity that was unjustly deductedfrom the income and output cycle as a result of the imbalance in the economic balance and thedeparture from the conditions of balance between aggregate demand and aggregate supply.Debt is a waste of financial resources allocated to productive accumulation. Except for theKeynesian school, which considers public debt to be an addition to aggregate demand after thedecline in the role of the private sector in investment as a result of pessimistic expectations thatwarn of signs of economic contraction. Public debt is linked to the exchange rate through theinterest rate channel, so that public debt causes competition for financial resources. Thiscompetition results in an increase in the local interest rate, which results in an increase indemand for the local currency with the aim of increasing investment, and the demand for thelocal currency raises the price of the local currency. Which means that there is an indirectrelationship between public debt and the exchange rate, but this relationship may create damagein the balance of payments in the near future. They assumed the existence of a long-term causalrelationship between internal public debt and the exchange rate. The main goal of this researchis to verify the economic relationship between the investigated variables, using thecointegration model and the error term correction vector model to prove the researchhypothesis. And the Kranger model of causality between the variables. The research reachedthe most prominent conclusion, which is that individual expectations for the internal publicdebt after each annual deficit in the state’s general budget cause a decrease in the value of thelocal currency due to the increase in demand for the dollar and the decrease in demand for thedinar, which means that there is causality in one direction. From internal public debt to theexchange rate, this is what was proven by the results of Kranger’s causality test.

MONETARY AND FISCAL COORDINATION IN UKRAINE AND ITS IMPACT ON ECONOMIC GROWTH UNDER THE CONDITIONS OF MARITAL STATE

The purpose of this paper is to examine the effectiveness of monetary and fiscal policy instruments, to determine the level of influence of monetary and fiscal factors on economic growth, as well as to justify ways for improving the effectiveness of monetary and fiscal policy coordination. Insufficient coordination of monetary and fiscal policies entails devastating economic consequences. The critical analysis of scientific publications proved that today the coordination of monetary and fiscal policies depends on the degree of balanced regulation of interest rates and inflation control. The research uses a NARDL model to capture mainstream trends in the influence of monetary and fiscal factors, as well as in the empirical study of their coordination. According to the estimations it was established that the weighted average rate of NBU instruments is absorbed to a greater extent in the monetary component of coordination, the system of managing the internal public debt – in the fiscal component. The participation of monetary authorities in the management of the national internal debt remains a debatable issue today. It is proved that the process of coordination of monetary and fiscal policies is influenced by the state of Ukraine’s economy during the war.Despite the difficult political and economic situation in Ukraine, it is necessary to focus on improving the coordination of monetary and fiscal policies. In particular, the significant contribution of the NBU in financing the state budget deficit due to their purchase of government bonds needs to be resolved. Strengthening the role of macroprudential policy in the coordination of monetary and fiscal policies, one of the goals of which is to counter the emergence of a systemic crisis; formation of a clearly developed coordination strategy, which would be based on clearly defined goals, set tasks on the basis of selected methods and instruments for their achievement.

The Role of Public Debt in Economic Growth: An Empirical Analysis Evidence for Western Balkans and European Countries

Public debt was often considered as a supplementary source of public finances. In six Western Balkan states, a fixed regression model was employed to gauge the effect of public debt on economic growing using panel data. Findings demonstrate that public debt significantly affects economic growth. It was found too that direct foreign investments have a substantial influence into the economic growth. As an option for financing, state governments use external and internal public debt, which is often part of the debate approximately how much public debt should be used. Use of public debt varies from country to country and depends on economic growth and budgetary factors and economic and social demands. Reviewing the literature, it can be observed impact of public debt on overall economy and its growth and this was too used by states as an opportunity for economic growth. This is also reflected in the case of our study where we analyzed the data for EU member countries and Great Britain compared to the Western Balkans countries. During the research it is observed influence of public debt in economic growth on these countries and as such many states have exceeded the limits of the use of public debt based on legal frameworks, with the sole purpose of financing public demands and influence of economic growth. Public debt in this paper identifies the affiliation with economic growth through the specification of linear and non-linear time series models using the panel model for the years 2012-2021 for 35 countries in total. Also, the regression analysis shows us a support and correlation among public debt versus economic growth of countries part of this study. This is observed in developed countries, which have a higher potential and possibility of financing economic activity through public debt, while the Western Balkans countries are often challenged with the possibilities of financing from public debt. As variables we have GDP, Foreign Direct Investments and Inflation.

An investigation into the impact of total revenue and internal public debt on Iraqi economic growth from 2004 to 2021

This paper examines the effect of internal public debt and total revenue on economic growth in Iraq between 2004 and 2021. It aims to demonstrate the level of effectiveness of the independent variables on the gross domestic product as Iraq’s economic situation has been going through many difficulties during the mentioned period. After investigating the stability level of the data via unit root test and checking the long-run relationship between the variables, the autoregressive distributed lag ARDL model has been implemented. The results illustrate that total revenue, including oil and non-oil sources, contributed significantly and positively to boosting economic growth. However, internal public debt negatively influenced it; this is because the majority of the borrowed money by the government is used in the field of consumption rather than investment.

Operational spending pressure in light of the use of the internal public debt to finance the public budget deficit in Iraq

The study shows the influence of operational spending pressure with the use of the internal public debt tool in financing the general budget deficit in Iraq from 1990 to 2021. The results of the standard analysis according to the statistical program (Eviews9) show that reducing operational spending leads to filling Part of the general budget deficit because operational expenditures constitute the largest proportion of the total public expenditures, the use of the internal public debt instrument provides funds to cover part of the public budget deficit, and this is explained by the value of R2 = 0.88 meaning that (88%) of the changes in the budget The generality as a dependent variable is due to the changes in (operating expenditure, internal public debt) as independent variables and (12%) represented by the random variable. Also, the value of (5.458682F =) at a Sig. level of 5% and a probabilistic value (Prob = 0.005242) shows Joint integration between the variables included in the model indicating a long-term equilibrium relationship, as the value of (DW = 1.520874) showed that (3 > DW > -3) has no autocorrelation problem for the values of the random variable indicating operating expenditure pressure. Using internal public debt instrument leads to filling part of the deficit in the public budget in Iraq. All the tables are prepared by the researcher based on the outputs of the Eviews9 program.

The Path of the Internal Public Debt and its Potential to Influence the Money Supply Iraq Case Study for the Period (2016-2020)

This research focuses on the effects of the internal public debt, whether direct or indirect, in Iraq, and in view of the rentierism that characterizes the Iraqi economy, and in financial crises, especially when prices drop, it remains interested in its budgets to finance the increasing public spending through the internal public debt ,The greater the size of that debt, the greater the public spending, and the role of the internal public debt in the money supply in Iraq comes through the government financing the public budget deficit through some internal public debt instruments, especially bonds and treasury transfers. The researchers reached the existence of such a relationship in Iraq, but it was in a state of fluctuation, due to the presence of other variables that prevent it, and to achieve the goals sought by the researchers, the research included three sections, the first focused on a review of the most important concepts for the research variables, and the second was about analyzing Those variables, and in the last section included an analysis of the relationship between the internal debt instruments and the money supply in Iraq for the period (2016-2020).

Public Debt Management Experience: The Case of EECCA Countries

The aim of this study is to cluster the most widely used public debt management tools peculiar to the EECCA (Eastern Europe, Caucasus, and Central Asia) markets. Overall, the results show that the volume of EECCA countries’ public debt relative to GDP declined from 2000 to 2015. However, as their public debt enhanced after 2016 and until 2020, inclusive, the need to choose proper tools for its management intensified. The main cause of public debt in most EECCA countries is the state budget deficit (Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan). The second place was taken by the balance of payments deficit (Armenia, Belarus). The only unique country was Azerbaijan, since it is likely to use public debt to finance economic and infrastructure development projects. No less interesting is that not all EECCA member states generate internal public debt. Kyrgyzstan, Moldova, and Uzbekistan have external public debt exclusively due to the lack of free resources that can be attracted from within the economy. In general, the investigation revealed that the main tool for managing internal public debt in EECCA countries is public bonds issued in national and foreign currencies. As for external public debt management, the top position is taken by external public bonds and international loans. The study has only two limitations: methodological and implementation. Other macroeconomic indicators of economic development were not considered, even though they may change the assessment of the effectiveness of the selected tools of public debt management. Meanwhile, the results can only be applied to those countries whose financial market is already formed and who have access to international financial markets. Otherwise, the tools of public debt management are limited.

Analysis of the development of internal public debt and its components in Iraq for the period (2004-2020)

يعد الدين العام واحد من المتغيرات التي لها أهمية كبيرة على التأثير في المتغيرات الاقتصادية لاسيما في الانفاق العام وعرض النقد ،اذ تستقطع أعباء الدين العام جزءاً من الانفاق العام فضلاً عن تأثيرها في عرض النقد ومن هذا المنطق جاء هذا البحث ليسلط الضوء على أثر الدين العام الداخلي في العراق للمدة ( 2004-2020) في ضوء تحليل بعض مكونات الدين العام ، وقد أفرزت النتائج في هذا المجال النمو المستمر في تطور مكونات الدين العام الداخلي خلال مدة البحث فضلاً عن تقلبات في نمو الدين العام الداخلي من جهة اخرى ، وبعد تقدير العلاقة كمياً أظهرت نتائج بأن مكونات الدين العام الداخلي خلال مدة البحث (2004 – 2020) ضمن حوالات الخزينة التي بحوزة البنك المركزي تلعب دوراً كبير في تمويل العجز المؤقت في الموازنة الحكومية قياساً بالمصارف التجارية التي تعمل على تقليل الاعتماد على البنك المركزي واعطاء دور اكبر الجهاز المصرفي, فاحتلت المرتبة الاولى، فيما احتل الدين على وزارة المالية المرتبة الثانية في تمويل العجز المالي.

Scenario modelling of the impact of the dynamics of public debt on the gross regional product of Russian regions

The subject of this research is public debt and its impact on the dynamics of the gross regional product (GRP) of Russian regions. The aim of the paper is to study and scenario forecast the dynamics of changes in the internal public debt of Russian regions and model its impact on the gross regional product. The relevance of the study is due to the fact that most regions in Russia are forced to increase their internal public debt to cover the budget deficit and attract additional resources to solve important problems of socio-economic development and implement strategic projects and programs. The scientific novelty of the research consists in the development of a methodological approach to modelling and scenario forecasting of the level of GRP of different groups of regions, taking into account the dynamics of changes in their public debt using ARIMA modelling methods and panel regression analysis. The authors apply the methods of panel regression analysis and ARIMA modelling. The authors theoretically substantiated that public debt has a different effect on the GRP of Russian regions, grouped the regions according to the identified trends in the dynamics of public debt (the first group — regions with the dynamics of debt reduction over the period from 2005 to 2019, the second group — with the all-Russian trend of debt reduction since 2017, and the third group — with the dynamics of increasing debt over the period under review); developed a methodological approach to modelling and scenario forecasting of the GRP level of the Russian regions, taking into account the dynamics of changes in their public debt; carried out ARIMA forecasting of the dynamics of the public debt of different groups of regions and built regression models of the influence of the dynamics of the public debt on the GRP of Russian regions within the selected groups; formed forecast scenarios for changes of the GRP level of regions, taking into account the identified dynamics of transformation of their internal public debt. Conclusions: public debt has a negative impact on the dynamics of the GRP of Moscow and the Moscow region and a positive effect on the dynamics of the GRP of the regions of the second and third groups. The findings of the study may be used by the federal and regional executive authorities to find ways to reduce public debt and increase the level of socio-economic development of territories.

Formation and management of public debt sustainability on the example of the Republic of Kazakhstan and the Russian Federation

PurposeThe purpose of this paper is to study debt sustainability of countries with a resource-based economy on the example of the Republic of Kazakhstan and the Russian Federation.Design/methodology/approachMacroeconomic indicators and data on external and internal public debt of the Republic of Kazakhstan and the Russian Federation for the period from 2007 to 2019 were analyzed using quantitative, qualitative, comparative, descriptive and graphical methods. Based on the collected data, the indicators were calculated, analyzed and compared, taking into account the threshold values, using The Debt Sustainability Framework for Low-Income Countries of the International Monetary Fund and the World Bank.FindingsThe results of the study showed that the indicators of the public debt of both the Republic of Kazakhstan and the Russian Federation, during the period covered by the study, were in the zone of reduced risk and were stable. In addition, the study revealed a slight shift in the structure of the public debt of the Republic of Kazakhstan toward a decrease in the share of domestic borrowing (from 67% to 55%), whereas in the structure of the Russian public debt, the share of domestic borrowing increased significantly (from 52% to 74%).Originality/valueThe results of this study can be applied by scientists to analyze the sustainability of public debt in various countries and regions, as well as by officials to determine the fiscal and budgetary policies of the Republic of Kazakhstan and the Russian Federation, as well as other states.

Analysis of the internal public debt of the Russian Federation and methods of its management

Analysis of the internal public debt of the Russian Federation and methods of its management

الجامعة المستنصرية / كلية الادارة والاقتصاد

The American economy suffers from a general budget deficit, mainly due to the high public expenditures, especially the military, as the United States of America occupies the first place in the world in the proportion of military spending, and the budget deficit is mainly financed through the sale of government securities, which led to an increase in the volume of public debt In the United States of America, which is a dangerous indicator, especially after interest payments on public debt exceeded the barrier of $ 500 billion for the year 2018, which pushes them to borrow again to finance these benefits, this cumulative and continuous increase in the size of public debt works to influence the economic variables Monetary and financial. The research aims to analyze the development of internal public debt in the United States of America and its most important causes, in addition to clarifying the mechanisms and methods used to alleviate the severity of the internal public debt without compromising the ability of the economy or the ability to repay previous debts to maintain investor confidence in the strength of the American economy. The research reached several results, the most prominent of which is that the large increase in the volume of the internal public debt and the consequent increase in the money supply did not negatively affect the monetary side of the economy as inflation rates did not reach high levels and international reserves increased, accompanied by a decrease in interest rates. While the research presented several recommendations, including the need to achieve financial discipline and market access to borrow at the lowest possible costs by issuing debt regularly, in addition to avoiding resorting to any special measures to increase the volume of public debt and adhere to the debt ceiling approved by the US Congress.

Сучасний стан державного боргу України та перспективи використання зарубіжного досвіду управління державними запозиченнями

The article is devoted to an important component of the country’s financial security –public debt. The formation of governmental borrowing is caused by the State’s need for additional financial resources. These resources are used to ensure the fulfillment of all tasks set before the State aiming to ensure economic and social prosperity. Improperly developed policy of public debt management will undermine the financial security of the State. To analyze the state of public borrowing, the following indicators were considered: the volume of total, external and internal public debt of Ukraine from 2017 to 2021; the ratio of external, external-guaranteed, internal and internal-guaranteed public debt of Ukraine in 2021. It was determined that over the last 5 years the dynamics of governmental borrowing has been changing from positive to negative and vice versa. The problems of public debt management in Ukraine include inefficient using of borrowed funds; raising loans to cover existing debt; imperfect legislative support; small volumes of gold and foreign exchange reserves; permanent budget deficit, etc. The following prospects for public debt management were identified: a policy to reduce the budget deficit; greater focus on domestic creditors; diversification of investors; fulfillment of IMF lending conditions; simplification of the IGLBs procurement system, etc. The international experience of government borrowing management was also considered. The most effective public debt model that can be implemented in Ukraine is the example of Sweden, where the government launched a policy of reducing public debt through systemic reforms that need to be implemented at all levels of the State management

Dynamics of Public Debt Sustainability and Economic Growth: The Case of Sri Lanka

Over the past decades, most of the developing nations in the world have to face a critical issue of rising public debt. In Sri Lanka, public debt has increased to a higher level during the post liberalization period. Debt can be influenced economic growth and general welfare of the public only it is used properly without transferring additional burden on public. Therefore, it is beneficial to evaluate the short run and long run effect of debt on economic growth and its sustainable level. Hence, this study examines the dynamics of debt sustainability and the impact of public debt on economic growth in Sri Lanka using annual time series data for the period 1960-2018. This study uses deductive research approach and the model framework develops based on the literature. This study adopts econometric procedures to find out the short run and long run effect of internal and external public debt on economic growth in Sri Lanka and the sustainability of public debts analyze using graphical analysis with the support of the past literature. The econometrics procedure follows unit root test, co-integration tests and vector error correction mechanism together with granger causality test to investigate short run and long run effects of debt on growth. Empirical findings of the study revealed that internal and external public debt has positive impact on economic growth in the long run confirming crowding in effect of investment. Further, Gross domestic capital formation and government expenditure has positive impact on economic growth in the long run. The coefficient of Error Correction Term (ECT) suggests disequilibrium in the real GDP growth is corrected at the speed of 58 percent annually confirming the existence of long run relationship between debt and growth. Granger causality test confirmed uni-directional causality running from real economic growth to internal public debt in Sri Lanka. The sustainability of public debt in Sri Lanka is not in a good position as most of such measures reflect unfavorable trend over the last period. Finally, the finding of the study is useful to the policy makers to design and implement appropriate policies to achieve desired level of economic growth for the country.

УПРАВЛЕНИЕ ВНУТРЕННИМ ГОСУДАРСТВЕННЫМ ДОЛГОМ В РОССИЙСКОЙ ФЕДЕРАЦИИ

The task of effective management of the internal public debt, in the context of the need to carry out government borrowings in order to financially support the current and accepted expenditure obligations of the Russian Federation, is urgent and requires a search for new approaches to its solution. The article examines the features of the management of the state domestic debt in Russia. The analysis of key indicators of management of the state domestic debt of the Russian Federation is carried out, the main directions of the domestic debt policy of Russia at the present stage are considered.

ОЦЕНКА СОВРЕМЕННОГО СОСТОЯНИЯ ВНУТРЕННЕГО ГОСУДАРСТВЕННОГО ДОЛГА РОССИИ

In the article assesses the current state of Russia's domestic public debt. An analysis of the structure and dynamics of the internal public debt of the Russian Federation was carried out, the problems of managing the internal public debt of Russia are highlighted. Proposed measures to increase the effectiveness of the domestic debt policy pursued by the Russian Federation.

INFLUENCE OF INFLATION TARGETING ON MACROECONOMIC DYNAMICS IN UKRAINE

The article defines the influence of monetary policy changes on the main macroeconomic indicators of the state. Among such indicators, a special role is assigned to the exchange rate of the hryvnia. For many years, the key objective of the monetary policy of the National Bank of Ukraine was to ensure the stability of the national currency of Ukraine. Since 2015, the main objective of the NBU is to achieve and maintain price stability. Therefore, the article examines the effects of changes in monetary policy and their impact on the exchange rate of hryvnia. The dynamics of changes in the index of consumer prices was analyzed, as well as the main reasons for the sharp increase of this indicator were determined. Important indicators of the stability of the economic environment are also public debt and gross domestic product. According to the results of the analysis, the dynamics of changes in the volume of nominal and real gross domestic product was investigated. It was found that under the influence of inflation, the indicators of real gross product and nominal gross product differ considerably. Therefore, the analysis was carried out for each indicator separately. The influence of inflation targeting instruments on the external and internal state debt of Ukraine is analyzed. The structure of public debt has been investigated, and the analysis of changes in external and internal public debt has been carried out. The ratio of the state debt of Ukraine to the gross domestic product is determined and the rate of its change is researched. It is found that this ratio is approaching the optimal level. In order to determine how the introduction of the inflation targeting regime on the level of income of the population, the growth of prices for separate groups of products was investigated, and the dynamics of changes in nominal and real wages were analyzed. Key words: inflation, inflation targeting, discount rate, nominal gross product, real gross domestic product, hryvnia exchange rate, public debt, wages.

Evolution and Prospects of the Federal Loan Bonds Market Development

The government securities market is the most crucial element of the financial market in any country that plays an important role in funding of public expenditures and development of the national economy. At present, government securities make up more than 70 % of the internal public debt of the Russian Federation and more than 90 % of the public debt in bonds are federal bonds. Changes in the market of federal loan bonds that took place in 2011-2017 are described in the paper. Trend data characterizing the market and where it belongs to in the structure of the internal public debt of the Russian Federation are analyzed. The paper shows how macroeconomic indicators, debt policy of the country, demand for federal loan bonds, including that by foreign investors, influence development of the public debt market and creation of new types of market instruments. The authors also examine prospects of the federal loan bonds market and the expected trends in its development.

Involuntary Unemployment in a Neoclassical Growth Model with Public Debt and Human Capital

Abstract Even more than eight decades since the publication of Keynes’ “General Theory of Employment, Interest, and Money” modern macroeconomists disagree on the notion of “underemployment equilibrium” with so-called “involuntary unemployment”. While the majority of macro theorists trace involuntary unemployment back to frictions and rigidities in the adaptation of wages and output prices to market imbalances, a minority position holds that even under perfectly flexible output prices and wage rates involuntary unemployment might occur. Morishima in “Walras’ Economics” and more recently Magnani presume that contrary to the majority view aggregate investment is not perfectly flexible but governed by “animal spirits” of investors. The aim of the present paper is to integrate the Morishima-Magnani approach into a Diamond-type overlapping generations’ (OLG) model with internal public debt subsequently extended by human capital accumulation. It turns out that in spite of perfectly flexible real wage and interest rate involuntary unemployment occurs in intertemporal general equilibrium when aggregate investor sentiments are too pessimistic regarding the rentability of investment in real capital. In the model extended by human capital a higher public debt to output ratio decreases unambiguously involuntary unemployment, if initially the endogenous output growth rate is higher than the real interest rate.

Internal public debt and economic growth: the case study of Ukraine

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.