Share Of Public Debt Research Articles

ANALYSIS OF THE LEVEL OF THREATS TO THE SECURITY OF THE COUNTRY'S ECONOMY

The article examines the public debt in the GDP of the Republic of Uzbekistan, the cost of servicing the public debt in the state budget revenues and their dynamics, and also, based on the method of econometric analysis, reveals the relationship between the change in the share of public debt in GDP and the change in the level of threats to the economic security of the country.

Money Supply, Inflation and Budget Deficit in Russia Compared to the United States

The author examines the causes and sources of the depreciation of money in Russia compared with that in the United States. The subject is causal connections between the budget deficit, money supply, and the depreciation of money. The relevance of the research for Russia is determined by concerns about macroeconomic stability and high inflation. In the case of the United States, an increase in the money supply and an inflation spike occurred because of the debt financing of the federal budget deficit. The scientific novelty of the paper lies in considering the two main options for monetary policy to support the liquidity of public debt: hard and soft, and the analytical methods and results of the research. One of the important scientific results is that the burden of public debt should be measured not as the ratio of public debt to gross domestic product (GDP) but as the share of public debt in a bond market. The second scientific result is very important for the practice: during 2011–2022, in the eight biennial periods, the GDP deflator was approximately equal to the growth of the money supply M2 minus GDP growth. Thus, the depreciation of money was directly caused by monetary policy. In the other three biennial periods, a substantial difference was observed, probably because of external shocks. As the method of the study, the author estimated the effect of interest rates caused by crowding out corporate debt by public debt. It was substantiated that to obtain the effects of soft monetary policy and thus the increase of M2 to GDP deflator, it is essential to use biennial periods. Based on the results of the analysis, it was revealed that, particularly in 2021–2022, the growth of the GDP deflator amounted to 139.8% and was due to the growth of the money supply M2 by 140.5%. At the same time, the effect on GDP growth was insignificant, at 3.4%. The key conclusion is that for the implementation of macroeconomic stability policies, it is necessary to manage the expansion of the M2 money supply, the exchange rate, and to use the GDP deflator as an important indicator in addition to the inflation index — consumer price index. A good way to achieve this is to adopt a special law for controlling inflation, similar to the USA Inflation Reduction Act.

Measures to prevent state default under martial law

Debt security is especially relevant for developing countries, because they recover from economic shocks longer than developed countries, and the consequences of such shocks are catastrophic for them. Default is one of the most undesirable consequences of defaulting on a debt security, which determines the relevance of the topic under investigation. The aim of the study was to assess the current condition and state policy on the provision of debt security in Ukraine under martial law and to generalize measures to increase debt security and minimize the risk of default. The article used the following methods: economic statistical analysis, structural system approach and abstract logical method. The study found that, with the onset of a large-scale invasion, the share of public debt in Ukraine exceeded the recommended value by about 47 % and increased by more than 58 % compared to 2021. The conclusions of the research propose measures to increase debt security, divided into domestic and international measures.

Government securities in ensuring the debt security of Ukraine in conditions of full-scale war

The subject of research there is conceptual principles of issuing government securities to ensure debt security in conditions of full-scale war. The purpose of the article is to clarify the economic essence of the debt security category through the definition of its structural elements, as well as the features, advantages and reasons for issuing government securities in conditions of full-scale war. Method or methodology of the study. During the research, historical, analytical-empirical, inductive-deductive, comparative research methods were used to implement the principle of objectivity of scientific presentation; the method of analysis and synthesis - when evaluating indicators of debt security; graphical presentation of research results - when calculating the weighted average yield of military bonds. Results of the article. The article examines the issue of the essence, reasons for the issue and profitability of government securities in the conditions of martial law in Ukraine, considers the need for the management of government securities as the only tool in subordinating the government from the standpoint of ensuring Ukraine's debt security in the conditions of a full-scale war. It is considered that a full-fledged and liquid internal market of government securities will allow to reduce the cost of state borrowing and reduce the risks of default. Attention is paid to the matter of the issue and profitability of a new financial instrument for Ukraine - military OVDP. Debt security is studied as a dynamic process taking into account the positive effects of the use of borrowed external and internal funds. It was determined that the full-scale war reversed the positive trend towards a decrease in the share of public debt in GDP and forced a departure from the strategy of strengthening debt security, and the growth of governamental debt during the state of war is a forced phenomenon. Field of application of results. The results of the research can be used in the theory and practice of public debt management in conditions of full-scale war. The assessment of debt indicators and their analysis will be a relevant source of information for developing ways to strengthen Ukraine's debt security in peacetime. Conclusions. The growth of the public debt during martial law is a forced phenomenon: tax revenues allow to finance expenditures by only one third. Having analyzed the structure of the public debt from the standpoint of instruments for attracting funds, we can come to the conclusion that government securities are the only state-controlled instrument for ensuring debt security in conditions of forced and uncontrolled growth, primarily of external state debt. Military bonds have a specific purpose, and the economic risks caused by a military invasion do not allow the use of OZDP and Eurobonds as debt refinancing instruments.

Аnalysis of public debt based on long time series, trends and forecasts

The size and impact of public debt on economic and social processes is a very relevant issue today. The crisis caused by the coronavirus epidemic has caused a significant increase in public debt not only in Hungary, but also in the whole world. It can be said that the central issue of economic policy today is how to get out of this situation, what tools are needed to return at least to the pre-crisis level of public debt on a fair basis. The purpose of our research is to analyze public debt as a share of GDP in Hungary based on long time series, establish trends and make a forecast. The share of public debt in GDP is one of the most important macroeconomic indicators. This is justified not only by its role in the analysis of economic processes (risk, economic growth, investments, money and capital markets), but also by its constitutional-financial-legal assessment. The ratio of public debt to GDP is an important indicator for the long-term stability of economic processes in the state. The relevance of the analysis of public debt based on analytical trends is enhanced by the economic shock caused by the COVID epidemic, which was an unpredictable factor, and the situation formed by the epidemic deviates significantly from the stable trends of economic processes in previous years.For the study, secondary data were used, which were evaluated using trend analysis. Statistical smoothing of the time series of public debt as a share of GDP was tested at a statistically acceptable level using a quadratic polynomial trend. Modeling was performed using linear and logarithmic trend functions, in both cases a less favorable fit of the function was obtained than in the case of an exponential trend. The obtained short-term forecast indicates a gradual decrease in the state debt indicator, which is confirmed by expert conclusions.

ASSESSMENT OF THE IMPACT OF PUBLIC DEBT ON THE FINANCIAL SECURITY OF THE COUNTRY

The article reviewed current trends in the field of external debt, which further exacerbate the problems in the political, economic, financial and monetary spheres of the economy. This is primarily due to the inefficient system of public debt management and leads to exceeding the threshold values ​​of debt security. It was found that the amount of debt in the context of financial security of a country should first be studied in relation to GDP, what fully reflects the real economic situation in the country under the influence of inflation. The share of public debt in recent years has exceeded 60 % of GDP, which requires the government to take measures that would limit the possibility of borrowing in order to reduce public and state-guaranteed debt. Observations of the structure of Ukraine's public debt for the period 2011-2020 show the predominance of external debt and the gradual growth of its share. The peak of the level of public debt of Ukraine beyond the border falls on the period 2014-2017, but as of 2020 this figure was 60.8 %.Ukraine's public debt ratio is estimated in terms of currency structure, which shows that the major's share of debt in 2020 is denominated 46.22 % in US dollars. The threat to financial security for Ukraine remains high, as exchange rate volatility increases the repayment of principal and interest on debt.The analysis of public debt over the past 10 years shows the intensification of threats and risks to financial security by international financial institutions through external lending, as well as the high level of Ukraine's debt to external and domestic creditors. The study of indicators as indicators of financial security over the past 5 years shows the insufficient level of budget security of the country and the presence of internal and external threats to financial security of Ukraine.It is determined that the government's urgent task is to optimize the sources of public debt financing together with the development of clear and transparent rules of debt policy for the assessment of debt security indicators and financial risk management. The result of such changes is expected to reduce the amount of credit borrowing and a positive impact on the level of financial security of the state.

Public Debt of Ukraine: Features of Formation and Influence on Economic Growth

Abstract. Introduction. Nowadays, Ukraine’s economy, as well as other economies, suffers from the global crisis due to Covid-2019. Expenditures of the country increase with a considerable rapidity, especially on healthcare and social protection. Taking into consideration the fact that accumulated budget revenues do not always cover the necessary expenses, country is in need to take credits to cover the budget deficit, which arises. These loans constitute public debt, the increase in maintenance costs of which may lead to a slowdown in economic growth, which is already taking place in Ukraine. Purpose. Determination of the features of the formation of public debt in Ukraine and research of its impact on economic growth in 2011-2019. To achieve this goal, the following tasks are envisaged: study of the main stages of the formation of public debt in Ukraine; analysis of the dynamics and structure of public debt 2011-2019 years; research of the relationship between domestic and foreign debt and GDP with the help of a two-factor model; interpretation of the results and recommendations for optimizing the structure of public debt. Results. The article examines the formation of Ukraine's public debt since the country's independence (1991). Based on statistics and the work of domestic scientists, a brief description of the nine main stages of formation and accumulation of public debt was identified and provided; the structure of public debt (by sources, maturities and types of creditors) for 2011-2019 is analyzed; the dynamics of internal and external debts during the specified period is represented; an empirical analysis of the relationship between domestic and external debt and GDP is done; The Medium-Term Public Debt Management Strategy for 2019 – 2022 of the Ministry of Finance of Ukraine on Public Debt Management was considered. Based on empirical research, it was found that domestic debt has more positive impact on economic growth than external borrowing. The public debt management strategy for 2019-2022 developed in the context of macroeconomic stabilization contains four main objectives of public debt management and the first one is to increase the share of public debt in the national currency. Therefore, we can conclude that the results obtained in the study coincide with the strategic directions of the country's debt policy in the medium term.

THE INCLUSIVE DEVELOPMENT CONCEPT AS A MODERN PARADIGM FOR INTENSIFICATION OF IMPLEMENTATION OF INNOVATIONS

The aim of the article is to generalize the approaches to the definitions of inclusive economic development as a modern paradigm of intensification of innovation. The main methodological method of research is a system-structural approach that allows you to most effectively organize the search to solve problems. Methods of comparative, functional analysis, classification are also used. The theoretical basis of the article has been the conceptual provisions and scientific principles developed by domestic and foreign scientists on issues of inclusive economic development, tools for its implementation. However, the problems related to the development and implementation of an effective mechanism for the implementation of the inclusive economy in the context of the intensification of innovative development remain incomplete. The importance and significance of these issues led to the choice of the topic of the article, setting the purpose and objectives of the study. The main indicators of Ukraine’s inclusive development are analysed and the factors hindering the inclusion effective development are identified. The adoption of a new system for assessing economic development by the world community will help to adjust the domestic policies of a number of states, which will contribute to international economic integration and the development of the methodological framework of national and international statistics bodies. It has been found that 11 indicators out of 12 in Ukraine have a negative trend. Among them, the largest decline has been observed in labor productivity and the share of public debt in GDP. One of the most important obstacles to inclusive economic development has been found to be high levels of inequality, which limit access to education for different groups and negatively affect the labor market, which is filled annually with low-skilled labor. Expanding quality and access to education plays a crucial role in overcoming this barrier. It has been proven that the concept of inclusive development can best ensure the implementation of the principles of sustainable and balanced development, while avoiding such threats as: crises related to lack of resources and limited access to them; increasing social inequality and poverty; exclusion of certain marginal groups from the political, economic and social life of society; rising unemployment; social and political conflicts; environmental crises. The relevance of inclusive innovations for the economy development is substantiated and the directions of state policy are formed to ensure inclusive innovation development. The directions of cooperation between the state and business are proposed to ensure not only inclusive economic development, but also its connection with public investment policy, which would reduce the level of inequality in society and contribute to improving the citizens’ well-being.

Reducing Public Debt: The Experience of Advanced Economies over the Last 70 Years

This paper investigates the episodes of public debt reduction in advanced economies since the Second World War. We find 30 episodes of large reductions in the public debt-to-GDP ratio. Four main approaches succeeded in lowering the debt ratio. First, after the end of WWII, high and unexpected inflation eroded a large share of public debt. Second, during the Bretton Woods era, a mix of financial repression, high economic growth and moderate inflation helped reducing public debt. Third, since the 1980s, several advanced economies followed orthodox fiscal adjustments, namely improving their primary balance by reducing expenditure and/or raising taxes. The fourth approach (debt restructuring) was implemented only in one case: Greece in 2011-12. One key finding of our paper is that debt reduction has never been achieved by relaxing fiscal policy (cutting taxes or increasing expenditure), hoping that this would set in motion a growth process sufficiently strong to lower the debt ratio (the so-called “denominator approach” which has recently become fashionable in some countries, including Italy). The empirical evidence of the last 70 years suggests that running a sufficiently strong primary surplus is the only viable option to reduce public debt ratio nowadays, particularly in countries that are part of the euro area.

Rast javnog duga, velika recesija i fiskalna konsolidacija - primer iz Srbije

This paper analyses the dynamics of public debt growth in Serbia between the fourth quarter of 2004 (2004Q4) and the same quarter of 2017 (2017Q4). The empirical estimates capture the upward shift in public debt growth from the onset of the Great Recession. The results also show how policy makers have managed to curb the growth of public indebtedness in Serbia between 2014Q4-2017Q4. The government should, however, put greater fiscal efforts to reduce the overall share of public debt in gross domestic product in accordance with the fiscal rules of the Republic of Serbia and the Maastricht convergence criteria.

State-Contingent Debt Instruments for Sovereigns

Background. The case for sovereign state-contingent debt instruments (SCDIs) as a countercyclical and risk-sharing tool has been around for some time and remains appealing; but take-up has been limited. Earlier staff work had advocated the use of growth-indexed bonds in emerging markets and contingent financial instruments in low-income countries. In light of recent renewed interest among academics, policymakers, and market participants—staff has analyzed the conceptual and practical issues SCDIs raise with a view to accelerate the development of self-sustaining markets in these instruments. The analysis has benefited from broad consultations with both private market participants and policymakers. The economic case for SCDIs. By linking debt service to a measure of the sovereign’s capacity to pay, SCDIs can increase fiscal space, and thus allow greater policy flexibility in bad times. They can also broaden the sovereign’s investor base, open opportunities for risk diversification for investors, and enhance the resilience of the international financial system. Should SCDI issuance rise to account for a large share of public debt, it could also significantly reduce the incidence and cost of sovereign debt crises. Some potential complications require mitigation: a high novelty and liquidity premium demanded by investors in the early stage of market development; adverse selection and moral hazard risks; undesirable pricing effects on conventional debt; pro-cyclical investor demand; migration of excessive risk to the private sector; and adverse political economy incentives.

The role of creditor seniority in Europe's sovereign debt crisis

The share of public debt that is held by lenders with preferred creditor status (i.e. the IMF, ECB, ESM, etc.) has increased substantially during Europe's sovereign debt crisis. Empirically, we document in both macro and survey data that there exists a close relationship between the increase in senior tranche lending and the interest rates of countries in crisis. With regard to policy implications, we point out a predicament that policymakers are facing: while aiming to stabilize interest rates at a reasonable level, providing further senior loans might achieve just the opposite, as private markets are gradually pushed into a junior position. — Sven Steinkamp and Frank Westermann

The Role of Economic Trade-Offs in the Audit Opinion Decision: An Empirical Analysis

We extend existing audit opinion models by incorporating economic tradeoffs that arise in the auditor's qualification (modification) decision. Prior qualification studies (e.g., Dopuch, Holthausen, and Leftwich [1987]; Bell and Tabor [1991]) do not investigate whether the opinion issued is influenced by particular trade-offs facing an auditor. On the one hand, the audit firm faces the risk of losing the client if it issues a qualification, and on the other, failing to qualify exposes the auditor to lawsuits and reputation loss. We model the auditor's qualification decision as a two-stage model. We estimate a bivariate model that breaks down the probability of qualifying into two components: (1) the probability that the client deserves a qualified opinion based on the audit and (2) the probability that the auditor reports a qualified opinion, given the auditor considers that the client deserves such an opinion. We hypothesize that the second-stage decision to qualify or not is influenced by factors such as the auditor's risk of litigation, the type (Big Six or not) of auditor, the extent of outsider ownership, the share of public debt in total debt, the relative importance of the client in the auditor's portfolio, and the future growth rate of the client. Our results indicate that the auditor's litigation risk, the extent of outsider ownership, the relative importance of the client in the auditor's portfolio, and future growth are important factors in the audit opinion decision. Estimated mean and median probabilities indicate significantly higher values of reporting probabilities for qualified as compared to unqualified firms, suggesting that the second stage is an important component of the qualification decision.