جستجوی مقالات مرتبط با کلیدواژه « public debt » در نشریات گروه « اقتصاد »

Despite the notion that economies with abundant natural resource revenues should have a lower default risk and thus a lower share of public debt, this notion is not generally valid. Natural resources in these countries serve as a guarantee to procure more public loans and binds them in debt trap. In this regard, this article examines the short-term and long-term effects of natural resource rent on public debt in developing countries during 2000-2020. For this purpose, first, a model was designed with the presence of basic variables affecting public debt, along with the variable of share of natural resource rent from GDP, and using panel co-integration tests, the existence of a long-term equilibrium relationship between the variables of the model was confirmed. Finally, the pooled mean group (PMG) approach was used to measure long-term and short-term relationships, and the e Dumitrescu-Hurlin test was used to determine causality. The findings of this research show that the effect of the share of natural resource rent from GDP on public debt is negative (and significant) in the short term and positive (and significant) in the long term. The results of the Dumitrescu-Hurlin test also indicate the existence of a two-way causal relationship between the abundance of natural resources and public debt. Based on this, it can be said that the abundance of natural resources in developing countries leads to higher public debts in the long term, and high levels of public debts also cause rapid extraction of natural resources in these countries.

Public debt is a government-related variable that links several successive governments. Each government may have different opinions and priorities regarding the application of financial policies in the economy, including the level or composition of public expenditures. The purpose of this article is to investigate the asymmetric effect of public debt on financial development in Iran during the period 1973 to 2021. For this purpose, after performing relevant tests, using the non-linear autoregressive distributed lag (NARDL) model, it was observed that in the long term, there is a negative and significant relationship between positive and negative changes in public debt and financial development index in Iran. At the same time, the coefficient of positive changes in public debt is smaller than its negative changes; This means that the reduction of public debt has a greater effect on the development of the financial sector compared to its increase. Also, the results indicate a negative and significant effect of the interest rate on the financial development index.

one of the most important experience of the crisis of 2008 was the ineffectiveness of countercyclical fiscal policies to get out of the recession due to the high debt of the countries. Therefore most of the countries started strengthening their economy. Now,  one of the important questions in the field of public sector economy is how to achieve economic growth by reducing the debt ratio. The present study was developed in order to answer this question for a hypothetical economy with natural oil revenues. For this purpose, control theory has been used and simulations have been made for a closed economy in a ten year period. The results of the simulation show that it is possible to simultaneously target the two issues of growth and debt with a consolidated fiscal policy.  In this proposed policy, a combination of government spending and tax rate, as control variables, is obtained, which leads us to the predetermined goals in economic growth and government debt ratio, as state variables, in each period. finally, oil modeling and control rules extracted in this study make fiscal stabilization less expensive for governments.

The abundance of natural resources, as an effective limitation on the government's strategies and the market mechanism, affects the government's behavior from various aspects such as the degree of economic openness, corruption, poverty alleviation, prosperity (Papyrakis & Gerlag, 2007; Segal, 2011) and, as a result, the public debts (Ampfo et al., 2021). Natural resources can raise government capital as a driving force. The growth of government capital can increase the quantity of private capital and production through productivity and cost savings. In addition to encouraging more of these dynamic elements, it can ultimately lead to economic development (Agnor, 2013). Conversely, studies such as Haman et al. (2016) and Arias and Restrepo-Echavarria (2016) show that such a perception is not necessarily correct. The country's reliance on the rent of natural resources can lead to an increase in government spending and a decrease in tax revenue, which ultimately means more public debt. Therefore, the investigation of the factors affecting public debts in developing countries, especially Iran, is of particular importance due to the weakness of the tax system and the existence of a stable budget deficit. In Iran, oil rent is one of the substantial and effective factors in public debts. Understanding the influence of oil rent on public debts enables policymakers and planners to increase the efficiency of government policy while reducing the harmful effects of non-optimal allocation of oil revenues. Considering the importance of the subject, the present research examines the impact of oil resource rent on Iran's public debts.

Investigating the effect of oil rent on public debts was done with the model of Ampfo et al. (2021) and Mamdeli et al. (2021) in which the dependent variable of "ratio of public debts to GDP" is a function of the ratio of "oil rent to GDP", economic growth, and control variables such as inflation, trade openness, and unemployment. The research variables had an annual frequency and were collected in constant 2010 prices. The data source is the World Bank and the International Monetary Fund and covers the period from 1974 to 2021. In order to analyze the effect of oil rent on public debts, the threshold regression approach was used, in which the value of the threshold value, i.e., the ratio of oil revenue to GDP, is calculated by minimizing the sum of the squared errors.

The research model was estimated considering a structural breakpoint and two regimes. The volume of the threshold variable, i.e., the ratio of oil rent to GDP, is 22.23%. The ratio of oil rent to GDP before the threshold is -2.71, and it is -0.644 after crossing the threshold level. In both regimes, oil rent has a negative and significant effect on public debts. In the high oil regime, however, the impact of oil rent on the public debts is less than that in the low oil regime, which is due to the effects of resource curse on the economy. The results of the research on the negative relationship between oil rent and public debt are consistent with the findings of the studies by Sadik-Zada and Gatto (2019), and Mamdeli et al. (2021). Also, Ampfo et al. (2021) and Yang et al. (2023) indicate that oil rents have a negative and significant effect on public debts in the short run. Eskandaripour et al. (2018) show that, with the increase of oil revenues in Iran, the equilibrium level of the government debts is at its lowest level. Therefore, the government can use oil revenues in a favorable way in order to keep down and stabilize the public debts. Economic growth has a non-linear effect on public debt. So, in a low oil regime, economic growth has an increasing and considerable impact on the government debts, but, in a high oil regime, it has a significant and decreasing effect on the public debts. Unemployment rate and trade openness have non-linear effects on public debts; in the low oil regime, they have a decreasing and significant influence on the public debts, but in the high oil regime, they have a positive and significant effect on the government debt. In both oil regimes, inflation has a positive and significant impact on public debts. However, after crossing the threshold level, its intensity decreases.

Conclusions and policy implications: 

The findings show that in Iran's economy, the volume of government debts is decreased with the increase in oil revenues. In a low oil regime, the oil revenues improve the capital and financial resources available to the government by increasing the income, thus providing the ability to adjust the level of the government's debt. In a high oil regime, however, the government needs heavy budget support by adopting ambitious spending policies in various infrastructures and projects. This decreases the effect of oil rent on public debts in the regime of high oil income. Therefore, in the high oil regime, the continued use of oil resource rents may cause a resource curse which not only fails to expand the industries related to oil resources but also suppresses the industries independent of domestic resources and even widespread economic development. As a result, it will create higher challenges for government finances and debts.

Government investment and public debt are two important tools of financial policy affecting macroeconomic performance, which can be considered as one of the few remaining policy instruments to support growth. In the current study, the panel smooth transition regression model (PSTR) has been used to identify the threshold levels of government investment and public debt in 23 oil exporting countries during 2000 to 2021. Considering investment and public debt in separate models as transmission variables, the estimated results indicate the existence of a two-regime non-linear relationship. The estimation results show that in this group of countries, the positive effects of government investment on economic growth increase with the increase in the level of investment. During the first regime, public debt has a negative effect on economic growth. If public debt surpasses the threshold level, its negative impact on economic growth decreases.

Considering the significant increase in the public debt burden in Iran over the past years and considering the dependence of the government's budget on revenues from oil sales, this study investigated the short-term and long-term asymmetric effects of oil rent on public debt in Iran during the years 1996-2021. For this purpose, the augmented bounds cointegration test and Non-linear Autoregressive Distributed Lag (NARDL) estimator have been used. The results show that the short-term and long-term effect of the increase in the share of oil rent from GDP on the share of public debt from GDP )public debt burden index) is negative and significant and this effect is positive and significant for the decrease impulses; In such a way that the size of effects of increasing impulses is smaller than the effects of decreasing impulses (confirmation of asymmetric effects). The results of the asymmetric Granger causality test also show the existence of a causal relationship from the increasing impulses of the public debt burden to the increasing impulses of the share of oil rent from GDP, which confirms that high levels of public debt in the country lead to the faster extraction and sale of oil resources. According to other results, economic growth has a negative and significant effect, the share of consumption expenditure in GDP has a positive and significant effect, and inflation has an insignificant effect on the public debt burden in Iran. Based on this, regulating and limiting the level of public borrowing during periods of booming oil revenues, transferring natural resource revenues through the financial system to the real sector, and adopting anti-corruption policies to prevent the deviation and waste of oil revenues in order to have a greater effect of oil rent on public debts and on the other hand, the control of public debts and the correct management of the ratio of debt to GDP in order to reduce the speed of extraction and sale of oil resources are the most important policy recommendations of this research.

The purpose of debt from both domestic and foreign sources is to bridge the resource gap between savings and investment. But not paying attention to debt and its role in the process of economic growth and development, may lead to adverse effects of debt on economic growth and also affect development programs. Therefore, the purpose of this study was to investigate the effect of public debt on economic growth in selected Islamic countries. For this purpose, data from 12 selected Islamic countries during the period 2000-2019 were used. Then, using panel data-based methods such as panel cointegration techniques, the best estimation model was selected. The results of estimated model showed that in general, the variables of financial development index, inflation, population growth, quality of institutions and life expectancy increased GDP per capita or in other words, economic growth in selected Islamic countries. The results also showed that the variables of public debt and gross fixed capital formation have a negative and significant effect on economic growth in selected Islamic countries.

One of the major problems of developing governments, such as those of OPEC member states, is the government deficit and rising public debt. One of the reasons for this public debt is government policies faced with income inequalities. The opposite side said that the increased income inequality can lead to capital accumulation and thus increase production and tax payments and reduce government debt. The purpose of this study is to investigate the effects of income inequality on government debt at OPEC member countries are in the period 2010 to 2018. The method used is the threshold panel. The research results show that the relationship between income inequality and public debt at the OPEC member states is U-shaped and not linear. In other words, the effects of income inequality on public debt at OPEC member states are like the threshold.

Analysis of optimum and threshold rates of government debt in Iran and the effect of public debt on economic growth are the major purposes of this paper. As government debt is both economic and political phenomena, there are a lot of political economic literature that focus on some dimensions including and intergerneration redistribution, re-election of governments, , political budget cycles, , fiscal illusion, bargaining in legislation. Government debt effects on economic growth through six channels including government expenditure, interest rate, future tax, possibility of vicious triangle crises (debt, bank, and currency crises), and counter cycle policies. There are three points about the effect of government debt on economic growth. Some focuses on positive effect, some focuses on negative effect, and the last focuses on threshold effect. Using yearly data from 1974-2016 and with OLS approach, we show that the relationship between government debt and economic growth in Iran is inverse U, and the optimum rate of debt index (portion of government debt to GDP) in Iran is about 54.16 percent and the threshold level is about 108.32 percent. Moreover, it has been shown that from 1974 to the half of 1990’s, public debt to central bank was more than public debt to banking system, but after the middle of 1990’s this trend has been reversed.Comparison of the composition and the quality of public debts of Iran with other countries shows that major part of Iran’s public debt is short-run, while in developed countries, long-run debts are the major part, and as the portion of short-run debts goes up, the risk of dishonor increases; so it is necessary that some parts of Iran’s debt changes from short-run to long-run.

Achieving optimal economic growth is always one of the most important goals of any country, and due to the role of public debt in financing capital and economic growth, different views have been formed in this regard. One of the most recent views pertains to the non-linear relationship between public debt and economic growth. In this view, in the first regime, public debt has a positive and significant effect on economic growth, while in the second regime and after crossing the threshold level, it has a negative effect on economic growth. Accordingly, this study attempts to investigate the nonlinear effect of public debt on the economic growth rate for a selected group of countries; it also attempts to determine their respective threshold level. For this purpose, using the data for the period 1980-2017 and the Pool model, the existence of nonlinear effect of public debt on economic growth was investigated; In addition, using the threshold regression model (PTR), the debt threshold level of each country was determined. Findings confirmed an asymmetric U-reverse effect of public debt on economic growth. Correspondingly, it was found that the threshold level in the selected countries is lower on average compared with ‎developed countries.

Fiscal illusion is one of the effective factors on government’s budget status. Fiscal illusion refers to misinterpretation of financial parameters and overestimation and underestimation of expenditure and tax liabilities that leads to bias in budgetary decision at all levels of the government. Therefore, fiscal illusion in taxpayers confronts the politicians and the decision makers with a structure of motivations that prompts the adoption of public spending (expenditure) plans and increases the size of the government and its expenditure.The aim of this research is to investigate the effect of fiscal illusion on budgetary policy in selected developing countries between 2000 and 2014. For this purpose, we used dynamic panel data and a System Generalized Method of Moments GMM estimator. The results showed that fiscal illusion had a positive effect on budget deficit. So that the effect of fiscal illusion on budget deficit in the oil exporting countries it is higher than other countries; in the countries with high budget deficit is higher than in the countries with low budget deficit; in the countries with high fiscal illusion is higher than in the countries with low fiscal illusion, and in the high income countries is higher than other countries. Inflation has a positive effect and exchange rate as well as the degree of trade openness has negative effect on budget deficit.

In an economy system, government activities play a fundamental role in economic growth and development of countries, but increase these activities have a positive effect on economic growth until a certain threshold and from this threshold excessive increase in government activities not only have no positive effect on economic growth, but these activities are main barrier to growth.
Including of these activities, can mention the government''s capital expenditures and public debt. In this study, is tried to study the threshold effects and non-linear government investment and public debt on GDP in two separate models during of 2000-2016 using of provincial data and Panel Smooth Transition Regression Model (PSTR).
The results of linearity test show that there is a nonlinear relationship between variables. Also, the inclusion of a transfer function with a threshold parameter which is representing a two-regime model, is sufficient to determine the nonlinear relationship between variables. The results show that public debt and investment in first regime have a positive effect on GDP, but by crossing of threshold and entering to second regime, severity of this effect will be increased and negative. It seems, this result is due to the crowed-out effect on private sector and increase in public debt due to rising government spending and confirms Laffer curve hypothesis.

The continuous increase in government spending leads to widen the fiscal deficit gaps and that force government to borrow from internal and external resources. Due to various problems faced by the economy over recent years in Iran, It is usual that a part of government incomes and expenditures covers by the budget deficit. The main economic consequence of the high level of budget deficits is heavy public debt, which often would affect on economic growth. This study examines the impact of public debt on economic growth in the period 1980-2012. In this regard, by using the vector autoregressive model, we investigate long-run equilibrium relationship between public debts and economic growth. The results of the error correction model indicate that export and total factor productivity in short-term have a positive and significant effect on economic growth. However, domestic debt in short-term and long-term has a negative effect and external debt in long-term has a positive effect on economic growth.

Governments attempt to achieve the goals of low inflation rate and sustainable economic growth rate. The objective of this study is to analyze the roles of determinants such as the liquidity of money، weighted average of interest (profit) rate on banking deposits، exchange rate and the public debt on inflation and economic growth in Iran، using the quarterly data during the period of 1989-2008. This study is based on the theoretical works of the Sargent and Wallace (1981) by focusing on the ‘Fiscal Theory of Price Level (FTPL) ’ approach. In this study، through relying on the structural relationship between variables and economic shocks، while applying the required constraints، the constructed models are estimated by VECM and SVEM methods. Findings of the study are consistent with both the quantity theory of money as it was interpreted with Sargent and Wallace (1981) and the FTPL. More specifically، the inflation rate is largely affected by monetary–exchange rate policies as well as by fiscal policy. Although، the weighted average of interest sate does not play a significant role in the long–run relationship، a rise in public debt through increasing the liquidity of money plays a significant role in rising price level. But، a significant long sun relationship between the changes in the liquidity of money، interest rate، the public debt and the change in output level does not exist. The economic growth does respond mainly to the technological shocks and factors productivity improvements. In general، we conclude that the inappropriate monetary and exchange rate policies and the rise in public debt through fiscal policy are the main determinants of the inflation rate in the Iranian economy.