Public debt management in Serbia during transition, great recession and Covid-19 pandemic
This paper examines the nonlinear asymmetric behavior of the public debt/GDP ratio in Serbia in the first two decades of economic transition following the political and market reforms initiated at the beginning of the twenty-first century. Using quarterly data for the public debt/GDP ratio, a two-re...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
University in Belgrade
2024-11-01
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| Series: | Serbian Journal of Management |
| Subjects: | |
| Online Access: | https://aseestant.ceon.rs/index.php/sjm/article/view/52982/26448 |
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| Summary: | This paper examines the nonlinear asymmetric behavior of the public debt/GDP ratio in Serbia in the first two decades of economic transition following the political and market reforms initiated at the beginning of the twenty-first century. Using quarterly data for the public debt/GDP ratio, a two-regime self-exciting threshold autoregressive threshold (SETAR) model of order one identifies a public debt/GDP ratio threshold of 66.2% above which fiscal policymakers in Serbia take corrective action in the form of increased fiscal prudence. The estimated public debt/GDP ratio threshold roughly corresponds to a 60% threshold from the Maastricht fiscal criteria and shows how fiscal policymakers in Serbia systematically ignore the 45% public debt/GDP limit set in the national fiscal rules. Such fiscal policy behavior could jeopardize the credibility of fiscal institutions in Serbia and have a negative impact on fiscal discipline and the likelihood of sovereign default. |
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| ISSN: | 1452-4864 2217-7159 |