scholarly journals Growth-Maximizing Public Debt in Turkey: an Empirical Investigation

2020 ◽  
Vol 6 (20) (3) ◽  
pp. 68-87
Author(s):  
Gokay Canberk Bulus
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Empirical Investigation ◽  
Public Investment ◽  
Current Data ◽  
Debt Sustainability

The aim of the paper is to empirically estimate the growth-maximizing debtto-GDP ratio in the case of Turkey. To calculate the growth-maximizing debt-to-GDP ratio FMOLS, DOLS, and CCR estimators are used for the period from 1960-2013. According to the empirical findings the growth-maximizing debt-to-GDP ratio varies between 34.3% and 38.7%. Based on a comparison of these ratios to current data (29.1% for 2018), Turkey has the capacity for additional borrowing to achieve a growthmaximizing debt-to-GDP ratio. If this additional borrowing capacity is used for public investment with a return greater than the interest cost of the additional debt economic growth will be maximized and public debt sustainability supported.

Reform of the Policy on Public Debt Limits in Fund-Supported Programs

Policy Papers ◽  
2014 ◽  
Vol 2014 (83) ◽  
Author(s):  
Keyword(s):  
Public Debt ◽  
Public Investment ◽  
External Debt ◽  
Lower Income ◽  
External Financing ◽  
Medium Term ◽  
Debt Sustainability ◽  
Reform Proposal ◽  
Board Review ◽  
Lower Income Countries

The reform of the Fund’s policy on the use of conditionality on public external debt in Fund-supported programs (the “debt limits policy”) has been under discussion since March 2013. The discussion has taken place against a backdrop where lower income countries are seeking to boost growth through higher public investment levels, targeted in particular at large infrastructure gaps, while facing both a wider range of external financing opportunities and limits on the supply of traditional concessional financing. The reform of the Fund’s policy on debt conditionality in 2009 was a first step to accommodate these new realities: experience with the 2009 reforms has pointed to the need for more fundamental reforms to provide countries with greater flexibility to finance productive investments while containing risks to medium-term debt sustainability. The reforms proposed here build on the Board review of the debt limits policy in March 2013, ensuing informal Board discussions in January and May 2014, discussions at an informal seminar in September 2014, and various stakeholder consultations. In developing this reform proposal, staff has sought to first specify a robust set of principles to guide the use of public debt conditionality in all Fund arrangements and then examine how these principles should apply in the specific circumstances of countries that normally rely on official external concessional financing.

scholarly journals Can public debt stimulate public investment and economic growth in South Africa?

2018 ◽  
Vol 6 (1) ◽  
pp. 1516483 ◽  
Author(s):  
Thobeka Ncanywa ◽  
Marius Mamokgaetji Masoga ◽  
Christian Nsiah
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Public Debt ◽  
Public Investment

scholarly journals FISCAL POLICIES IN PANDEMIC TIMES: EUROPEAN EXPERIENCES

2021 ◽  
Author(s):  
Gligor Bishev ◽  
◽  
Aleksandar Stojkov ◽  
Fatmir Besimi ◽  
◽  
...  
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Empirical Literature ◽  
Policy Response ◽  
Fiscal Policies ◽  
Fiscal Consolidation ◽  
Fiscal Stimulus ◽  
Debt Sustainability ◽  
Fiscal Multipliers ◽  
The Impact

The pandemic recession was fundamentally different from ordinary recessions, and thus required a different policy response. We review the empirical literature on fiscal consolidation and fiscal multipliers. Then, we assess the impact of fiscal policies on the pace of recovery and public debt sustainability. A premature or a strong fiscal consolidation might result in lower rates of economic growth and elevated public debt as a share of GDP. We critically analyze different adjustment paths across Europe and offer policy-relevant recommendations. The issue is particularly relevant for countries with a strong fiscal stimulus and moderate to high levels of public debt.

INVESTING IN PUBLIC INFRASTRUCTURE: ROADS OR SCHOOLS?

2019 ◽  
pp. 1-30 ◽  
Author(s):  
Manoj Atolia ◽  
Bin Grace Li ◽  
Ricardo Marto ◽  
Giovanni Melina
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Equilibrium Model ◽  
Developing Economies ◽  
Thought Experiment ◽  
Public Investment ◽  
Scale Up ◽  
Public Infrastructure ◽  
Dynamic General Equilibrium Model ◽  
The Government

Why do governments in developing economies favor roads rather than schools in public investment scale-ups? We study this question using a dynamic general equilibrium model and argue that the different pace at which roads and schools contribute to economic growth, public debt intolerance, and political myopia are central to this decision. In a thought experiment with a large return differential in favor of schools, a benevolent government would intuitively devote the majority of an investment scale-up to them. However, the fraction of schools chosen by the government falls with increasing levels of debt intolerance and political myopia. In particular, political myopia is a meaningful explanation for the observed result to the extent that an extremely myopic government would not invest in schools at all.

On the determinants of economic growth: Empirical evidence from the Eurozone countries

2020 ◽  
Vol 23 (2) ◽  
pp. 210-229 ◽  
Author(s):  
Panagiotis Pegkas ◽  
Christos Staikouras ◽  
Constantinos Tsamadias
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Public Debt ◽  
Public Investment ◽  
Trade Openness ◽  
Growth Strategies ◽  
Fiscal Consolidation ◽  
Long Run ◽  
Determinants Of Economic Growth

This study empirically investigates the causal relationship between economic growth and several factors (investment, human capital, trade openness and public debt) in the Eurozone countries, where imbalances persist several years after the financial crisis. The results reveal a long-run relationship between variables and public debt, as investment, human capital and trade openness positively affect growth. On the other hand, there is a negative long-run effect of public debt on growth. Furthermore, the results indicate that there is long-run unidirectional causality running from investment, trade openness and human capital to growth and bidirectional causality between public debt and growth. The overall results reveal that Eurozone countries should base their growth strategies on fiscal consolidation, increasing exports, correcting the use of public investment and improving the quality of human capital, especially in higher education.

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