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Public Debt Sustainability In Serbia Before And During The Global Financial Crisis

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  • Vladimir Andrić
  • Milojko Arsić
  • Aleksandra Nojković

Abstract

We have analyzed the behaviour of primary fiscal balance and public debt in Serbia before and in the aftermath of the global financial crisis. The results of our analysis are: i) public debt to GDP ratioexhibits (near) unit root behaviour with an overall upward time trend; ii) the response of primary fiscal balance to public debt has been insufficient to mean revert the upward trend in government debt; iii) the efforts of the Serbian government to repay the debt principal after the fiscal rule breach have not been persistent, providing empirical support to the fiscal fatigue hypothesis; iv) the government budget constraint has deteriorated since the beginning of the global financial crisis; v) the response of primary fiscal balance to public debt from the onset of the global financial crisis has dropped more severely in comparison to other European economies.

Suggested Citation

  • Vladimir Andrić & Milojko Arsić & Aleksandra Nojković, 2016. "Public Debt Sustainability In Serbia Before And During The Global Financial Crisis," Economic Annals, Faculty of Economics, University of Belgrade, vol. 61(210), pages 47-78, July - Se.
  • Handle: RePEc:beo:journl:v:61:y:2016:i:210:p:47-78
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    Cited by:

    1. Miroljub Labus, 2020. "Transition And Post-Conflict Macroeconomic Policies In Serbia," Economic Annals, Faculty of Economics, University of Belgrade, vol. 65(226), pages 73-102, July – Se.
    2. Tashevska, Biljana & Trpkova-Nestorovska, Marija & Trenovski, Borce, 2017. "Estimating a fiscal reaction function for the South East European countries," MPRA Paper 91298, University Library of Munich, Germany, revised 2018.

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    More about this item

    Keywords

    Serbia; unit root tests; fiscal reaction functions; global financial crisis;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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