Public debt is an important means of bridging government financing gaps. Effective and efficient utilization of public debt can increase economic growth. However, excessive reliance on public debt raises macroeconomic problems. A large gap between revenue and expenditure forces a country to obtain debt. Debt thus obtained further deteriorates expenditure side. High level of public debt holds back the government to meet its macroeconomic objectives of economic growth, price stability and a viable balance of payment. The major implications are sluggish economic growth, macroeconomic uncertainty, decreasing development, investment crowding out, inflation, higher unemployment, deteriorating social conditions and rising poverty causing economic destabilization which itself leads to destabilization of the state. Nation of such a country is often involved in corruption, organized riots, violent protests, strikes, man-slaughter, terrorism and other such crimes. In case of Pakistan, the major cause of poor economic performance is extraordinary burden of both domestic and external debt. The current situation is unsustainable and if it is not altered immediately than collapse of Pakistan’s economy is for certain. It is therefore essential for the government to plan and place policies and structural reforms to take charge of the havoc being played by unsustainable level of public debt.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
11427.
Find related papers by JEL classification: H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management
This paper has been announced in the following NEP Reports:
References listed on IDEAS 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.: