Inflation and Public Debt Reversals in Advanced Economies

Fukunaga, Ichiro; Komatsuzaki, Takuji; Matsuoka, Hideaki

doi:10.5089/9781513521596.001

Cited by 3 publications

(2 citation statements)

References 17 publications

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“…In this case, there are difficulties in paying debts so that the debt value will decrease. The positive relationship between inflation and government debt in this study is in line with research conducted by Aizenman and Marion (2011); End et al (2015); Fukunaga, Komatsuzaki and Matsuoka (2019). Aizenman and Marion (2011) use United States government debt data to calculate the impact of rising inflation.…”

Section: Discussionsupporting

confidence: 84%

The impact of government debt on pro equality growth: Evidence from lower middle-income countries

Imam,

Januari

2024

International Journal of Economy and Business

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Pro equality growth is a condition of increasing economic growth with a reduction in income inequality. Data shows that in the last three decades, actual governement debt has increased. The main focus of this study is to prove whether government debt can produce pro equality growth. Moreover, there are two objectives in this study: (i) to investigate the impact of government debt on economic growth; and (ii) to investigate the impact of government debt on income inequality. This study uses panel data from 21 lower middle-income countries between 1989 and 2017. Method used in this study is three stage least squares (3sls). The estimation results show that government debt, has not been able to realize pro equality growth. Government debt can stimulate economic growth, but income inequality worsened. Although debt can be used as an investment in productive activities, the use of government debt cannot increase the accessibility and productivity of the poor. There are direct and indirect effects between government debt and income inequality. On the other hand, there is only a direct effect between government debt and economic growth, and there is no indirect effect through the income inequality pathway.

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Section: Discussionsupporting

confidence: 84%

The impact of government debt on pro equality growth: Evidence from lower middle-income countries

Imam,

Januari

2024

International Journal of Economy and Business

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“…4 The literature on the relationship between inflation and debt is vast. For example, taking into account a sample of 19 advanced economies, Fukanaga et al (2019) conclude that a 1 percentage point (pp) shock to inflation rate reduces the debt-to-GDP ratio by about 0.5 to 1 pp.…”

Section: Brief Framework: the Portuguese Public Finances During The F...mentioning

confidence: 99%

Testing the Sustainability of Fiscal Policy during the Portuguese First Republic Using Stationary and Cointegration Tests

Ferraz

2023

Economies

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The Portuguese First Republic (1910–1926) was marked by significant instability at the most diverse levels. With a special focus on the financial dimension of this period, the objective of this paper is to test the sustainability of the Portuguese fiscal policy, also referred to as the sustainability of public finances itself. The methodology involves testing the stationarity of public debt and budget balance and also the cointegration between state revenue and expenditure. The results obtained shows that the state’s intertemporal budgetary constraint was violated during the First Republic regime, which denotes unsustainability. This conclusion is justified by the existence of a non-stationary budget balance and the absence of cointegration between state revenue and expenditure. These results are manifestly different from those that have already been obtained for other Portuguese regimes, namely for the Estado Novo (1933–1974) and democracy (1974–present), where sustainability existed. This paper is yet another demonstration of how important it is to maintain control of state’s accounts. We hope that this paper can be useful to stimulate new research on Portuguese public finances and also on the important issue of fiscal policy sustainability.

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

Bashkim,

Ejup

2023

Wseas Transactions on Business and Economics

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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.

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Inflation and Public Debt Reversals in Advanced Economies

Cited by 3 publications

References 17 publications

The impact of government debt on pro equality growth: Evidence from lower middle-income countries

The impact of government debt on pro equality growth: Evidence from lower middle-income countries

Testing the Sustainability of Fiscal Policy during the Portuguese First Republic Using Stationary and Cointegration Tests

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

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