Interest Payments on Public Debt and the Quality of Public Finances
Irina Bilan and
Angela Roman ()
Ovidius University Annals, Economic Sciences Series, 2014, vol. XIV, issue 2, 429-435
In this paper we aim to study the effects of interest spending on public debt on the quality of a country’s public finances, in Romania and other developed and developing countries. Two different approaches have been taken into consideration. On the one hand, we showed that, when public indebtedness fails to promote economic growth and no compensatory measures are taken by governments, as budgetary expenditures raise and no additional ordinary revenue are available, government budget balances deteriorate and public debt further accumulates. On the other hand, it resulted that, when compensatory consolidation measures are undertaken in order to keep budget deficits and public debt under control, taxes are raised or public expenditures are reduced. As public capital expenditure is most often sacrificed, this alters the quality of public spending, due to the lower share of growth-enhancing expenditures.
Keywords: public debt; budget balance; public debt; budget balance; interest expenditure; capital expenditure; public policy (search for similar items in EconPapers)
JEL-codes: H54 H62 H63 (search for similar items in EconPapers)
References: View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://stec.univ-ovidius.ro/html/anale/RO/cuprins% ... 4%20issue_2_2014.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xiv:y:2014:i:2:p:429-435
Access Statistics for this article
Ovidius University Annals, Economic Sciences Series is currently edited by Spatariu Cerasela
More articles in Ovidius University Annals, Economic Sciences Series from Ovidius University of Constantza, Faculty of Economic Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Gheorghiu Gabriela ().