Limits of the Foreign Debt Burden
AbstractA simple model of the debt equilibrium under the conditions of a monetary board is developed. The model has three equations. The first one depicts the impact of the debt burden on the economic activity and the economic growth, respectively; the second one represents a relationship between the balance of payment deficit and the economic activity; the third one gives expression to a relationship between the debt burden and the balance of payment deficit. In order to make the system dynamic, it is required to take into account also of the structures of the state budget, but to the extent to which they are revenant to the foreign debt servicing. The model of the debt equilibrium, developed in principle, is applied to evaluate in practice the status and level of the debt burden in Bulgaria. Results from model calculations for three countries - Macedonia, Turkey and Poland are also presented. Findings show that taking into consideration the existing economic reality in Bulgaria in the beginning of the XXI century, the relative foreign debt reduction as an end in itself is not the best macroeconomic solution. Pursuing such a policy could impede the economic growth, which in turn would have a negative impact on the improvement of the international financial position of the country. Requirements come to the fore, that are related with the entire movement of the economy toward higher efficiency and this advance is also a pre-condition for a reduction in the relative debt burden.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Bulgarian Academy of Sciences - Economic Research Institute in its journal Economic Thought.
Volume (Year): (2005)
Issue (Month): 6 ()
Find related papers by JEL classification:
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bulow, Jeremy & Rogoff, Kenneth, 1990. "Cleaning Up Third World Debt without Getting Taken to the Cleaners," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 4(1), pages 31-42, Winter.
- HÃ©lÃ¨ne Poirson & Luca Antonio Ricci & Catherine A. Pattillo, 2002.
"External Debt and Growth,"
IMF Working Papers, International Monetary Fund
02/69, International Monetary Fund.
- Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, Università di Perugia, vol. 2(3).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vassil Zahariev).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.