Effect of Remittance Inflows on External Debt in Developing Countries

This paper analyzes the effect of remittance inflows on external debt in developing countries, by identifying international reserves as a potential transmission channel. Using panel data over the period 1970–2017 and covering 50 low-and middle-income countries worldwide, we find a positive and significant effect of remittance inflows on the external debt-to-GDP ratio. We also find a negative and significant effect of international reserves on external debt. After controlling for international reserves, the effect of remittance inflows on external debt increases;it remains positive and significant. The results suggest that the role of international reserves as a self-insurance mechanism, and the Dutch disease effect related to remittance inflows are at play. In addition, we find negative and significant effects of economic growth and savings-investment gap on external debt. We also find positive and significant effects of the nominal exchange rate and the United States lending interest rate on external debt. We discuss the policy implications of these findings, while highlighting factors that policymakers should focus on for containing external debt in developing countries in the post-COVID-19.

Íkiz Açık Hipotezi Türkiye'de Geçerliliği: Zamanla Değişen Nedensellik Analizi

Finansal ve ekonomik istikrarın sürdürülebilirliği açısından iç ve dış dengenin birlikte sağlandığı maliye politikalarının uygulanması son derece önem arz etmektedir. Bu nedenle, cari işlemler ile bütçe açıkları arasındaki ilişkinin incelenmesi politika yapıcılar, araştırmacılar ve ekonomistler arasında tartışılan önemli konulardan biri haline gelmiştir. Bu kapsamda, çalışmada Türkiye için Ocak 1998 – Aralık 2021 döneminde ikiz açık hipotezi, Granger nedenselliğin geçici istikrarını yeniden değerlendirmek amacıyla kullanılan yinelemeli algoritmalar kullanılarak araştırılmaktadır. Zamanla değişen Granger nedensellik analizden elde edilen bulgular, Türkiye'de ele alınan dönemde cari işlemler dengesi ve bütçe açığı arasında çift yönlü bir nedensellik ilişkisi olduğunu ortaya koymaktadır. Bu sonuç, Türkiye'de ikiz açık hipotezinin geçerli olduğunu ifade etmektedir. Aynı zamanda, nedensellik ilişkisinde anlamlı geçici değişimlerin olduğu gözlenmektedir. Seçim ve kriz dönemlerinde ikiz açık hipotezinin varlığı mevcut iken, 2002-2008 ve 2015-2021 dönemlerinde cari işlemler hedeflemesi politikası uygulanmaktadır. COVID-19 pandemisi döneminde ise, cari işlemler dengesi ve bütçe açığı arasında çift yönlü asimetrik aktarım mekanizmasının işlediği ifade edilebilir.Alternate :Implementing fiscal policies to ensure domestic and foreign balances together is of vital importance to sustain financial and economic stability. Therefore, investigating the relationship between budget deficit and current account deficit is one of the issues debated by popolicymakersnd economists. In this context, the existence of the win deficit hypothesis in Turkey is researched through recursive algorithms used to revaluate the temporal stability of Granger causality for the periods of January 1998-December 2021. The findings from time-varying Granger causality analysis reveal the existence of a bidirectional causality relationship between budget deficit and current account deficit. This result means the validity of the twin deficit hypothesis in Turkey. Also, the temporal changes in the so-called casualty relationships are observed significantly. During the electoral and crisis periods there is the existence of the twin deficit hypothesis wthe hileaccountnt acount targeting policy is implemented during the periods of 2002-2008 and 2015-2021. In the COVID-19 period, a bidirectional asymmetric transmission mechanism between budget deficit andcurrentt account deficit is worked can be stated.

Reinstating fiscal policy for normal times: Public investment and Public Jobs Programmes

This paper upholds the classical Keynesian position that a laissez-faire market economy lacks a spontaneous tendency to full employment. Focusing on the UK case, it argues that monetary policy could not prevent the economic collapse of 2008-9 or achieve full recovery from the Great Recession that followed. The paper then outlines the case for fiscal policy to regain a permanent status of primacy in modern macroeconomic management, beyond the pandemic emergency. It distinguishes between public investment and automatic stabilisers, reducing discretionary actions to a minimum. It presents the case for re-empowering the State'spublic investment function and for reforming the system of automatic counter-cyclical stabilisers by means of public jobs programmes.

Economic Role of Government Budget Revision in the Presence of COVID-19

Fiscal policies are one of the most important instruments of government to guide the progress of the country's economic development. They find significant use in cases where the economy is experiencing a period of recession, such as the current one caused by COVID-19. This study aims to assess the multiplier effects that budget revision has on the economy for the case of Albania, and more specifically by referring to the initial and revised budget scenario for the year 2020 which is characterized by significant changes caused by the presence of COVID-19. Referring to the multipliers from the input–output tables (IOT) the total effect that the state budget brings to the economy for a certain year is derived. From this paper, it appears that the budget restructuring that takes place during the year does not take into account the multiplier effect in the economy, but is mostly done for specific purposes related to certain government functions. In this context, it is very important that various options during budget revision are evaluated, concluding with the option that has the highest returns for the economy.

Public Debt, Governance, and Growth in Developing Countries: An Application of Quantile via Moments

Developing countries often encounter budget deficits by taking loans from internal and external sources. The effectiveness of public debt has been a long debate in the seminal and empirical literature. In this study, we investigate the effectiveness of public debt on economic growth, incorporating the role of governance in 44 developing countries. In doing so, we applied the Quantile Via Moments approach to analyze heterogeneous panel data ranging 1990–2000 considering the scale and location properties under different economic circumstances. Our results show that public debt impedes economic growth in all quantiles. Our empirical finding corroborates our proposition that in the presence of good governance, public debt promotes economic growth in the medium to higher quantiles. The empirical findings of this study confirm that governance is far more important in promoting economic growth.

Von der Corona-bedingten Schuldenaufnahme zur Wiedereinhaltung der Schuldenbremse

Die Wiedereinhaltung der Schuldenbremse auf der Bundesebene macht in den kommenden Jahren eine Reduktion der im Rahmen der Corona-Pandemie stark gestiegenen Neuverschuldung notwendig. In diesem Beitrag stellen die Autoren die fiskalpolitischen Spielräume im Vergleich mit der maximal zulässigen Nettokreditaufnahme unter der Schuldenbremse dar. Diese Spielräume erhöhen sich insbesondere durch den Abbau der Rücklagen sowie durch sinkende Zinsausgaben. Zudem passt die Konjunkturkomponente den fiskalischen Spielraum symmetrisch an die konjunkturellen Gegebenheiten an und ermöglicht damit das uneingeschränkte Wirken der automatischen Stabilisatoren. Verbesserungen der Verfahren, die zu weniger revisionsanfälligen Schätzungen des Produktionspotenzials führen, können dabei helfen, die Spielräume durch die Konjunkturkomponente der Schuldenbremse verlässlicher zu bestimmen. Einschränkend wirken unter anderem die Tilgungszahlungen, die sich durch die Inanspruchnahme der Ausnahmeregelung ergeben. Die Autoren zeigen alternative Möglichkeiten für die Tilgungszahlungen auf, mit denen die Tilgungen zusammengefasst und konjunkturgerecht gestaltet werden können.

Sustainability of the Currency Board in Bosnia and Herzegovina in the Conditions of a Negative Interest Rate on the Reserve Currency

The Currency Board in Bosnia and Herzegovina (BiH) uses the euro as a reserve currency in the conditions of a negative nominal interest rate on deposits with the ECB. In this paper, we investigated the impact of negative interest rates on deposits and negative yields on bonds denominated in euro on the general advantages of the currency board and the consequences for the functioning of the currency board in BiH. The impact of negative interest rates was measured by the currency board coverage index (IC). A negative nominal interest rate on the reserve currency creates a negative seigniorage in the country of the currency board, increases the costs of issuing domestic money and reduces the competitiveness of the economy. The monetary policy of the ECB in the conditions of the COVID-19 crisis generates negative influences on the functioning of the currency board. The COVID-19 crisis poses a threat to currency board coverage in BiH. Technically, a currency board can also function in terms of negative interest on the invested reserve currency as long as it can cover the costs of its business.

The Distribution of Transfers and Taxes: Incentives and Implications for the US Deficit and Debt

The United States, like many Western democracies, faces high and rising public debt that may be unsustainable in the long run. This US fiscal condition is the inevitable outcome of a political system that redistributes transfer payments broadly across citizen-voters and that restricts taxation narrowly across citizen-voters. US data since 1979 show exactly this pattern. These trends, often supported by vote-seeking politicians, pressures from citizen-voters, and political narratives, are commensurate with the countrys rising ratio of government debt to gross domestic product.

ASSESSMENT OF THE IMPACT OF GOVERNMENT REVENUE MOBILISATION ON ECONOMIC GROWTH IN NIGERIA

[...]this study focuses on the relationship between revenue generation and economic growth in Nigeria. [...]the study recommends economic diversification through strategic programs aimed at enhancing growth rather than remaining a mono-economy. According to Nzotta (2007), the tax system constitutes one of the very effective and efficient ways of generating internal revenue for the government. According to Alade (2017), government revenue sources comprise privatization proceeds, taxes, interest received, sale proceeds of goods, the commission received, and rent received among others.

Investigating Government lending during an economic crisis: a comparative analysis of four EU countries

Many economists argue that fiscal balance (i.e. preventing fiscal deficits and establishing rules for government lending) positively affects the growth rate. Several studies document a strong correlation between these two variables based on the Ricardian equivalence theorem and the crowding-out effect. It may be argued that high growth rates lead to a positive fiscal balance, while lower/negative growth rates lead to deficits (but not vice versa). This study examines this cause-and-effect relationship via a sample of four EU countries that have been affected by the economic crisis. Specifically, a Granger causality analysis captures the linear interdependencies among multiple time series to determine the causal relation between the budget deficit and the GDP growth rates for Greece, Italy, Spain, and Portugal. The results show that no clear rule governs the cause-and-effect relationship between the GDP growth rates and net government lending rates (as a percentage of GDP). Moreover, the literature supports the idea that fiscal improvement may lead to economic growth, while improving net government lending leads to an increase in the GDP growth rate. This study suggests some useful fiscal policies to apply during a crisis. Also, investigating government lending can be useful in a post-COVID-19 economic environment.

Effects of Covid-19 Related Government Budget Shortfall on Funding and Provision of Essential Public Services

This study investigates COVID-19 related budget revenue losses in US local governments, and their effects on funding and provision of essential public services such as EMS, healthcare, firefighters, police, welfare and public housing services. A survey was sent to county and city governments to learn about their revenue losses for fiscal year 2020 and their effects on funding and service provision. Results show budget revenue loss significantly impacts funding cuts for essential services and is most impactful on welfare and public housing services. Additionally, although funding cuts significantly influence levels of services provided, aid from federal government restrains the extent of funding cuts and the influence of cuts on EMS and healthcare. The findings imply intergovernmental transfers play a pivotal role in averting deep cuts that could be detrimental to saving lives during a crisis. Furthermore, funding availability is key to maintaining appropriate levels of services to help care for the sick and protect the vulnerable in society.

Tunisia: The Need for a New Development Model

The Tunisian revolution took everyone by surprise. What were the immediate causes of this historic event? What are the economic and financial challenges facing the country? How can they be addressed? The Tunisian revolution has proven the failure of the development model that has been in force since the seventies. The country is, today, facing major economic and social challenges, mainly recession, unemployment, regional disparity, a growing budget and current account deficit, a high inflation rate in addition to a heavy external public debt. The low level of national savings makes external financing the greatest challenge in the short and medium term. What development strategy should be followed? The objective of this article is to search for an appropriate development model that is capable of achieving the country's economic and social objectives;the determination of adequate and coherent policies for its operation;and finally to provide the decision makers with practical recommendations to be implemented.

Choosing the Optimal Tool for Fiscal Adjustment or Living under Fiscal Constraints: Panel Evidence from Selected OECD Countries

This article examines the long-run two-way causal relationship between government revenues and spending and their interaction with the yearly change in public debt for eighteen OECD countries by using annual data for 1976-2017 period. The empirical literature has mainly focused on the long run relationship between government expenditure and revenues or other single country time series while only a few studies have used panel causality analysis and none have investigated the link with the evolution of public debt ratios. The purpose of this paper is to present a dynamic model identifying the underlying relationships constituting the fiscal policy set-up in sample countries. We apply a robust dynamic panel causality methodology based on SUR systems and Wald tests with country specific bootstrap critical values. The study also aims to provide the basis for recommendations on the policy response to public finance challenges stemming from exogenous shocks like the global pandemic that began in 2020. By developing an enhanced analysis of the long-term causal relationship between taxation, spending and their interaction with changes in public debt, the study not only provides fresh insights into the sustainability and optimal design of fiscal adjustment efforts but also offers a country-specific schematization as a guide for policymaking.

Influence Of Revenue Streams On Financial Sustainability: Evidence From Kenyan Public Universities

This paper discusses the influence of various revenue streams (government grants, student fees, internally generated revenue, and endowment trust funds) on the financial sustainability of Kenyan public universities from the perspective of resource dependency theory. A longitudinal survey research approach was used and the final sample consisted of 31 public chartered universities in Kenya that had operated continuously for more than five years as of 2015. Panel data were extracted from the annual financial statements of these universities and other secondary data sources for the period from 2015 to 2020. A random effects regression model was applied to determine the correlation between the different revenue streams and financial sustainability. This study found that both government grants and student fees have significant relationships with the current ratio. By contrast, internally generated revenue and endowment trust funds have insignificant relationships with the current ratio. Not only do this study's findings contribute to existing empirical literature, but the results will also be beneficial to multiple stakeholders, such as university management, stakeholders, and researchers.

Debt Financing Options And The Financial Sustainability Of Universities In Kenya

We investigated the effect of debt financing options on the financial sustainability of universities in Kenya from 2015 to 2020. The data was obtained from 55 universities in Kenya registered by the Commission for University Education, as at December 31, 2020. We applied a random effects regression analysis in this study and the findings revealed that long-term debt has a positive, statistically significant impact on the financial sustainability of Kenyan universities. Thus, an increase in financial resources enhances financial sustainability. The findings further revealed that short-term debt and trade credit had no effect on financial sustainability. The study advises university management to employ optimal long debt levels because financing cost can affect an institution's financial abilities. Additionally, university management need to develop additional revenue-generating strategies to support their operations. Our study expands the literature on debt financing and the survival of higher learning institutions. We propose that future studies be conducted in other fields, including health and security, to contrast the influence of debt financing options on financial sustainability.

Economic growth in the Central East European Union and the Western Balkan countries in the course of Stability and Growth Pact and COVID-19 *

This research aims to provide an empirical assessment of the relationship between fiscal policy sustainability factors, like fiscal deficit and economic growth in the Western Balkan countries and East European Union Countries, using panel-level data for the yearly time span from 2000-2021. The empirical model provides the impact of fiscal deficit, alongside other control variables like inflation, schooling, total investments, trade openness, and output gap on economic growth in the selected group of countries. For the purpose of research, we employed Static and dynamic panel estimation techniques like Fixed Effects with Driscol and Kraay standard errors and system GMM. The findings confirm that fiscal deficit has significantly affected the growth level in both groups of countries. In addition, when the fiscal deficit has interacted with the COVID-19 dummy, it appears as a growth-enhancing factor. However, when the fiscal deficit interacts with the Eurozone debt crisis period, it becomes a growth-deteriorating factor. Other control variables like inflation, trade openness, total investments, and the output gap are found important factors in explaining the growth performance of the Central East European and Western Balkan countries.Alternate :Ovo istraživanje ima za cilj utvrditi empirijsku procjenu odnosa izmeðu čimbenika održivosti fiskalne politike, poput fiskalnog deficita i gospodarskog rasta u zemljama zapadnog Balkana i zemljama Istočne Europske unije koristeći panel baze podataka za godišnji vremenski raspon od 2000. do 2021. godine. Empirijski model istražuje utjecaj fiskalnog deficita, uz ostale kontrolne varijable poput inflacije, školovanja, ukupnih ulaganja, otvorenosti trgovine i proizvodnog jaza na gospodarski rast u odabranoj skupini zemalja. Za potrebe istraživanja koristili smo statičku i dinamičku panel procjenu tehnike poput fiksnih učinaka s Driscol i Kraay standardnim greškama i sustav GMM. Nalazi potvrðuju da je fiskalni deficit značajno utjecao na razinu rasta u obje skupine zemalja. Osim toga, kada se fiskalne varijable dovedu u interakciju s COVID-19 dummy varijablama, fiskalni deficit rezultira značajnim i pozitivnim učinkom na gospodarski rast. Meðutim, kada je fiskalni deficit u interakciji s razdobljem dužničke krize u Euro-zoni, on postaje čimbenik koji pogoršava rast. Ostale kontrolne varijable poput inflacije, otvorenosti trgovine, ukupnih ulaganja i proizvodnog jaza smatraju se važnim čimbenicima u objašnjavanju uspješnost rasta zemalja srednje i istočne Europe i zapadnog Balkana.

Impact of Global and Domestic Economic Variables on 10-Year Indian Government Bond Yield: An Empirical Study

Many research studies related to the impact of monetary policy and macroeconomic variables have already been conducted, but studies on combining this with global factors and its shocks are very few. To fill this research gap, the paper tries to find out the combined effect of global factors, macroeconomic variables, and monetary policy on 10-year Indian government bond yield using Structural Vector Autoregression (SVAR) and Autoregressive Distributive Lag (ARDL) model. This paper is designed to analyze the impact of various variables on 10-year Indian government bond yield, in the context of its continuous exposure to global factors like oil price shocks and changes in macroeconomic variables. The empirical findings, based on monthly data relating to the period January 2001 to April 2021, suggest that monetary policy has had a considerable impact on bond yields over a long-term horizon, which appears to be consistent with the prevailing Keynes theory. However, the output has the least impact on bond yield. This may be because the monthly data that is used in the study restricts to use GDP. Hence the Index of Industrial Production (IIP) data is used. Further, inflation shocks increase bond yields and global factors like oil price shocks have detrimental effects on bond yields for a long-time horizon of 24-36 months, whereas an increase in the 10-year US government bond yield results in an increase in 10-year Indian government bond yield.

DETERMINANTS OF BUDGET DEFICITS: THE EFFECTS OF THE COVID-19 CRISIS

This paper revisits the discussion on the determinants of budget balances and investigates the change in their effect in the context of the COVID-19 crisis. The analysis uses data on 43 countries and a system generalised method of moments approach. The results show that the overall impact of the global pandemic has led to a disproportionate increase in the estimated effects of the macroeconomic determinants on the budget balance. We also find that more developed economies were able to implement higher stimulus packages for the same relative level of primary balance. We believe that one of the factors affecting this outcome is that more of their government debt is held in domestic currency. © 2022

Erholung verliert an Fahrt - Wirtschaft und Politik weiter im Zeichen der Pandemie

ZusammenfassungInfolge der Maßnahmen zur Eindämmung der Corona-Pandemie ist die deutsche Wirtschaftsleistung in der ersten Jahreshälfte drastisch gesunken, vor allem in den Monaten März und April. Schon im Mai setzte eine kräftige Gegenbewegung ein, die sich in nahezu allen Branchen bis zum aktuellen Rand fortsetzte. Dieser Erholungsprozess dürfte an Fahrt verlieren. Die Institute erwarten daher nach einem Rückgang des Bruttoinlandsprodukts um 5,4 % (2020) einen Zuwachs um 4,7 % (2021) und um 2,7 % im Jahr 2022. Sie revidieren damit ihre Prognose aufgrund des nunmehr etwas schwächeren Erholungsprozesses gegenüber dem Frühjahr nach unten. Die Wirtschaftspolitik hat frühzeitig mit massiven finanzpolitischen Maßnahmen auf die Corona-Krise reagiert. Die Konjunkturprogramme haben im Zusammenspiel mit den automatischen Stabilisatoren dazu beigetragen, dass die verfügbaren Einkommen der privaten Haushalte selbst in der akuten Krisenphase insgesamt stabil blieben.Alternate :The corona pandemic has left substantial marks on the German economy and its impact is more persistent than presumed in the spring. In their autumn reports, leading German economic research institutes have revised their economic outlook downwards by roughly one percentage point for both this and next year. They now expect gross domestic product to fall by 5.4% in 2020 (previously 4.2%) and to grow by 4.7% (5.8%) in 2021 and 2.7% in 2022. The downgrade of the forecast follows a more pessimistic assessment of the recovery, which is being held back by those sectors that are particularly dependent on social contacts. The precrisis level of output will not be reached until the end of 2021 with GDP remaining at 2.5% below the level that would have prevailed without the pandemic. Despite massively falling back on shorttime working schemes, an estimated 820,000 jobs were lost due to the crisis. The government will run a record high budget deficit of 183 billion euros in 2020. In 2021 and 2022, deficits will remain substantial at 118 billion euros and 92 billion euros, respectively.

Precarity in Later life: Understanding Risk, Vulnerability, and Resilence

Neoliberalism is a policy framework that promotes the transferring of economic factors from the public sector to the private sector;it endorses limiting government spending, government regulation, and public ownership;and fosters stimulating free market capitalism (Brown, 2003;Greenhouse, 2010). Since the 1980s, with Ronald Reagan in the United States and Margaret Thatcher in the U.K., neoliberalism ushered in the policies of austerity and reduced government spending on social programs in general, and for older people (Pierson, 1995). In gerontology, this set of ideas challenged the heterogeneity of aging, contributing insights on power relations in regard to age and multiple and diverse social locations (Calasanti, 2009;Calasanti and King, 2015). (2017) , "Precarity draws attention to the implications of neoliberal practices that have altered late life through the combined impacts of the increased short-term contracts, decline in trade unionism, and declining forms of social protection that include a reliance on family/kin or market care, and private market pensions." Even prior to the COVID-19 crisis, the relationship between the construction of older people and the political response to their needs was shifting. Since the 1980s, a vortex of complementary demographic (the older population's tremendous growth), economic (anemic growth);fiscal (unprecedented budget deficits), and political (deeply embedded left-right conflict) pressures emerged (Hudson and Gonyea, 2012).