Public Debt Problem Research Articles

Public debt in new EU member states – Panel data analysis and managerial implications

The paper argues that it is impossible to resolve the public debt problem within the existing economic policy model without changing the conceptual relationship between monetary and fiscal policy, i.e. without reconfirming the relationship between the policies and without strengthening the fiscal policy role. Otherwise, it is believed, the current model leads to a recession, while public debt problem remains unresolved. The existing model does not question the creation and structure of private debt and its effects on public debt, but the attention is given only to irresponsible fiscal policy. Understanding the public debt determinants is a prerequisite for effective public debt management and for private agents’ positive expectations. In the paper, several managerial implications of the research results are, also, identified and presented.

The Problem of Public Debt (The Case of Visegrad Group Countries)

The Problem of Public Debt (The Case of Visegrad Group Countries)

The Restoration of Fiscal Stability. A Public Choice Approach on the Problem of Public Debt

In contemporary democracy fiscal policy is not employed for the fiscal control of necessary state activities but for generation of deficits which causes the state to feed on itself, expands enormously in the service of special interests and is contrary to the public’s interest in fiscal stability and discipline. Starting from the origin of and the reason for, the classical liberal state, I undertake an analysis of the historical theoretical background of public choice. The development and application of public choice analysis can work towards restoring fiscal stability, especially after the outbreak of the global financial crisis that generated the enormous increases in the public deficit and debt in the developed democracies.

Assessment of the Effectiveness of Adjustment Programs at the Core of the Greek Economy

Despite the seven-year implementation of three adjustment programs to address the sovereign debt crisis, the Greek economy is still in a prolonged recession and faces problems of competitiveness, political stability and social cohesion. At the same time, the fiscal adjustment policy did not solve the original problem of public debt. On the contrary, as recent evidence shows, the country’s ability to service its debt has deteriorated. The causes of the crisis and the failure of the selected economic stabilization policies are a multidimensional and interrelated complex. The Greek economy has supported its growth in recent decades mainly in domestic consumption, with little presence in areas with high added value and extrovert features, focusing mainly on traditional business sectors with limited innovation characteristics. Ιn this study we will try on reasonable arguments but also with a series of statistical data and indicators from sources such as the Organization for Economic Cooperation and Development (OECD), the World Bank, the World Economic Forum (WEF) and the Greek authorities to analyze the course of the Greek economy, evaluate the results of the selected policies and to formulate appropriate policy proposals.

An examination of independent fiscal councils and their orientation to the future and policy making

The aim of this paper is to review the rationale, nature and operation of independent fiscal councils (IFCs) in order to gain insights into how futures are being configured at executive levels of government and to examine how futures could be incorporated in policy making. The emphasis IFCs have placed on non-partisanship, transparency and forecasting is viewed as reflecting a particular understanding of the problem of public debt and a limited understanding of the future and policy making. Located within the context of increasing technocratic tendencies, it is argued that IFCs can be seen as part of efforts to secure the de-politicisation of policy making. Attempts to secure the de-politicisation of policy making may at best, be considered laudable, but naïve, and at worst, represents an ideological sleight of hand in attempts to colonise the future. Moving forward, it is argued that strategic foresight can make a vital contribution to an open form of policy making that deepens and extends an understanding of what the future could be - the necessary ficta of policy making.

Efficiency or speculation? A time-varying analysis of European sovereign debt

The outbreak of the Greek debt crisis caused turmoil in European markets and drew attention to the problem of public debt and its consequences. The increase in the return rates of sovereign debts was one of these consequences. However, like any other asset, sovereign debt returns are expected to have a memoryless behaviour. Analysing a total of 15 European countries (Eurozone and non-Eurozone), and applying a time-varying analysis of the Hurst exponent, we found evidence of long-range memory in sovereign bonds. When analysing the spreads between each bond and the German one, it is possible to conclude that Eurozone countries’ spreads show more evidence of long-range dependence. Considering the Eurozone countries most affected by the Eurozone crisis, that long-range dependence is more evident, but started before the crisis, which could be interpreted as possible speculation by investors.

“I think the middle class is disappearing”: Crisis perceptions and consumption patterns in Spain

AbstractThe aim of this article is to explore social discourses in Spain on the economic crisis under the scenario of austerity policies and cutbacks. The goal is to explore whether social perceptions have changed throughout the crisis that evolved from the collapse of the housing market bubble to a public deficit and debt problem, leading to record rates of unemployment and a dramatic decline in living standards. The long crisis has left an imprint on Spanish society and it is worthwhile exploring how Spanish citizens reflect upon the crisis. To do so, 18 focus groups were organized in two rounds (2010 and 2014) and the results of those group conversations are discussed and compared here. The analysis shows that the participants elaborated not only on reflections about the crisis and on how it has lowered their consumption levels, but also on their further views about the social structure and change. The notorious pessimism of Spaniards about their future, regardless of their class position, is highlighted in the results. A more critical narrative about the crisis seemed to emerge in 2014, leaving behind the guilt‐laden “living beyond our means” discourses that dominated in 2010.

GLOBAL ECONOMIC CRISIS AND EFFECTIVENESS OF PUBLIC SPENDING: THE EU PRACTICE

The financial crisis of 2008 affected the whole world and it had a negative impact on economies. The effects of the crisis are still experienced in several nations. Especially high budget deficits, public debt and unemployment problems caused a heated debate on public spending that was increased to prevent economic recession in the post-crisis era. This study aims to discuss public expenditure efficiency in the wake of global financial crisis. The study utilized a database including the indicators of; Public Expenditures (as a dependent variable), Gross Domestic Product (GDP), Gross Domestic Product Growth Rate, Unemployment Rate, Public Debt, Fiscal Deficit, Human Development Index (HDI). HDI. We used panel regression analysis for 28 EU countries, and time series analysis for the the top 10 countries in terms of per capita income for the period of 2000-2015. The following results were obtained: The high public spending did not affect the indicators used in this study in a positive way.

The Greek Public Debt Problem

This paper examines the issue of the Greek public debt from different perspectives. We provide a historical discussion of the accumulation of Greece’s public debt since the 1960s and the role of public debt in the recent crisis. We show that the austerity imposed since 2010 has been unsuccessful in stabilizing the debt while at the same time taking a heavy toll on the Greek economy and society. The experience of the last six years shows that the country’s public debt is clearly unsustainable, and therefore a bold restructuring is needed. An insistence on the current policies is not justifiable either on pragmatic or on moral or any other grounds. The experience of Germany in the early post–World War II period provides some useful hints for the way forward. A solution to the Greek public debt problem is a necessary but not sufficient condition for the solution of the Greek and wider European crisis. A broader agenda that deals with the malaises of the Greek economy and the structural imbalances of the eurozone is of vital importance.

The Greek public debt problem

Abstract: The present paper examines the issue of the Greek public debt. After providing a historical discussion, we show that the austerity of the last six years has been unsuccessful in stabilizing the debt while,at the same time,ithas takena heavy toll on the economy and society. The recent experience shows that the public debt is unsustainable and therefore a restructuring is needed. An insistence on the current policies is not justifiable either on pragmatic or on moral or any other grounds.The experience of Germany in the early post-WWII period provides some useful hints for the way forward. A solution to the public debt problem is a necessary but not sufficient condition for the solution of the Greek and European crisis. A wider agenda that deals with the malaises of the Greek economy and the structural imbalances of the Eurozone is of vital importance.

Centra finansowe offshore a problem nieuczciwej konkurencji podatkowej

The financial crisis has changed the perception of offshore financial centers. States struggling with the problem of huge public debt and international institutions, especially the OECD, began to accuse tax havens of using the unfair tax competition. Offshore centers were persuaded to adopt regulations which improve the exchange of tax information and facilitate mutual administrative assistance in tax matters.

Towards an Integrative Currency Area

Optimal currency area theory is the supporting knowledge base of the European euro area. However, the euro area does not work seamlessly, and many doubts have arisen in regard to the theoretical foundations of the project and the procedures used to implement it. In particular, the accession of new members remains doubtful. This paper develops a diagnosis and proposes modifications to the theoretical foundations of the optimal currency area in line with recent developments in economic thinking. This progress is focused on the application of a triad of abstract notions – capital, labour, and money – and the use of essential notions, among which labour self-financing is the most significant. The analysis leads to an integrative as opposed to a discriminative currency area. Another aim of this paper is to show how to reshape the existing discriminative euro area as an area involving states that do not fulfill the Maastricht criteria. An integrative area can involve states with different productivity levels, allowing the fixed exchange rate criterion to be withdrawn. In addition, the application of self-financing removes the problem of dominant public debt. A major part of this paper develops a measure of labour productivity and applies it to procedures involving the use of exchange rates.

Unemployment Effects of the Greek Crisis: A Regional Examination

Greece faces a strong economic crisis as a consequence of the public debt problems and the economic adjustment program applied in the Greek economy. One of the main consequences has been the growth of the unemployment. Although studies examined the crisis’ consequences to the Greek economy, no study focused on the regional impact and particularly on the unemployment. Even thought the unemployment grew up considerably during the crisis period, this growth had a different impact within Greek regions; even within the same region, it affected on a different level the regions’ departments. This study examines the growth of the unemployment on a departmental basis and tries to connect it to the department's production specialization. The study examines the period just before and during the crisis period, 2005 to 2012. Results show that departments specialized on tourism and agriculture are less affected than other departments.

An analysis of public debt levels in both developed and developing countries

The main objective of this paper is pointing out the importance of high public debt problem as well as the underlying causes that have led to rise in public debt in selected countries. The following methods were used in this research: historical method, deduction, generalization methods and statistical methods. By observing data on ten year trend of public debt in selected countries, we have concluded that there is a trend of increase in public debt, as a percentage of the gross domestic product of a country. Each of the analyzed countries (Canada, United Kingdom, Greece, Argentina and Serbia) has specific causes that have led to rise in public debt, but the main cause that is common to all countries is the excessive consumption of state organs and reduction of tax revenues that has arisen as a result of reduced economic activity due to the global economic crisis in recent years. By analyzing the data on the trend of public debt in the observed countries in the period from 2003. to 2014., we have concluded that the problem can be solved by increasing gross domestic product, or reducing government spending.

Dealing with the Increasing Public Debt in Egypt

The objective of this paper is to identify the magnitude of the public debt problem in Egypt and to provide some guidelines for policymakers in dealing with the increasing public debt. In the paper, the issue of public debt is looked at as a result of the interaction of fiscal policy and the economic performance, and not as a statistical concept only. It consists of four sections and an introduction. Section (1) provides an identification of the magnitude of the public debt problem in Egypt. Section (2) presents a forecast of the level of public debt in Egypt till the year 2020 using a VAR model. Section (3) provides a forecast for the size of the public debt in Egypt under various scenarios where both economic growth and fiscal policy were considered. Section (4) summarizes the findings and policy recommendations that came out of this study. The conclusions drawn from this research may be summarized as follows. (1) Based on the model used in the paper and public debt indicators, public debt in Egypt is expected to be sustainable till the year 2020. (2) Economic growth has a very strong impact on reducing public debt in Egypt. (3) Fiscal consolidation is very important in reducing public debt because of its impact on economic growth. However, in the process of fiscal consolidation, the Egyptian government has to consider rationalizing spending and not to cut investment spending.

Public Debt, Fiscal Decisions and Political Power

The present paper treats the issue of economic foundations, on which political power rests, and the specific problem of public debt in the developed countries. Starting from the general question: “Why do rich governments borrow so much?” the paper develops a model of political power based on the possession of capital, and on the transformation of public possession into private property rights. Empirical investigation follows, in a sample of 21 countries, demonstrating that there is an objectively existing transfer of capital from public borrowing to private property rights; that transfer is connected mostly to the property of non-productive assets, and goes beyond the easily inferable relation to net exports. That the transfer from public borrowing to private property rights is strongly correlated with the relative dispersion or concentration of power in the political system. We are witnessing a progressive withdrawal of public finance and public borrowing as a means of transferring capital, with a simultaneously growing idiosyncrasy (cross-sectional variance) of fiscality.

Globalisation, Democratisation and the Institutional Transformation of Taiwan's Welfare Regime

In the context of the discussion about the governance capacity of small states in the world market raised by Katzenstein, the case of East Asian newly industrialised countries is an interesting one. This article takes the development of social policy in Taiwan as a case study through which to explore the role of social policy in the process of rapid industrialisation in small states. It is argued that in the initial phase of industrialisation the productive component of social policy was highlighted by the developmental state to serve the goal of economic development. Social policy functioned at this stage as an effective instrument to dampen the cost of labour and thus contributed to the low-cost strategy of developmental state. Since the 1980s, however, social policy has been profoundly transformed as a consequence of economic globalisation on the one hand and domestic democratisation on the other. It is argued that social policy making since the 1990s in Taiwan has shifted in emphasis from the productive to the consumptive component. Finally, it is suggested that three factors will be decisive in determining Taiwan's social policy in the future: limited governmental revenues, fiscal strain due the public debt problem and the steering capacity of minority governments.

The problem of public debt (the case of Spain)

The present paper concerns a crucial problem of contemporary public finances, that is the public debt. Apart from the definition, the causes and methods of incurring debt , the present paper demonstrates the acceptable limits of being indebted. Furthermore, the paper presents the scale of public debt in the world and the current status of public finances of Spain (one of the most indebted countries).

Islam, Depoliticization and the European Crisis of Democratic Legitimacy

A new form of political discourse hostile to Islam has been gaining ground in Europe. Initiated by neo-nationalist parties it appeals to liberal values and is now penetrating mainstream politics. The recent French presidential campaign threw light on the way Centre Right parties vying for government are increasingly instrumentalizing hostility towards Islam to respond to the political crisis triggered by the problem of public debt across the European Union. Critics are approaching this phenomenon through the lens of Foucault's notion of governmentality, questioning the assertion that Muslims cannot integrate in European societies because of their religion and highlighting the failure of European nation states to treat them as citizens and promote their socio-economic inclusion. This perspective yields valuable insights: it shows how the presence of Muslims challenges the belief of European societies in their self-perceived rationality and tolerance, resting on their commitment to secularity as epistemic category. The strident defense of secularism that accompanies Islamophobia is part of the discourse of securitization that characterizes the neo-liberal form of contemporary governmentality and promotes the de-politicization of social problems. The notion of governmentality, however, cannot account fully for the root-cause of Islamophobia: the loss of collective purpose that has triggered a crisis of government and seen the concern for efficient governance to erase the goal of collective self-determination. At heart, Islamophobia constitutes a manifestation of the European states' crisis of democratic legitimacy.

FINANCIAL SHOCKS, UNEMPLOYMENT AND PUBLIC POLICY

This paper reviews key features of the 2007–08 financial crisis, ‘Great Recession’ and European public debt problem. In the light of these it discusses new avenues of research that have opened up. A large body of opinion supports continued research within the dynamic stochastic general equilibrium (DSGE) paradigm, dealing incrementally with inter alia financial frictions, heterogeneous agents, and more descriptively realistic models of wage and price adjustment than ‘Calvo contracts’. However, the crisis has boosted more radical approaches to money and finance, modelling bubbles in asset prices, and taking forward insights from psychological research and experimental and behavioural economics.