Suchergebnisse

This study is an attempt to explore the short-term and long-term effects of
the fiscal deficit along with other macroeconomic variables on the
deteriorating trade deficit of Pakistan from 1980 to 2018 by using time
series estimation techniques. The result of the autoregressive distributed
lag (ARDL) bounds testing approach and error correction term revealed the
existence of cointegration among variables of interest. The estimated
long-run and short-run results of the ARDL approach showed a significant
positive effect of fiscal deficit on Pakistan's trade deficit in the
short-run, whereas a significant adverse effect is observed in the long-run.
The findings validated the twin deficit hypothesis in the short-run, whereas
twin divergence proposition is observed in the long run. The study suggests
prudent fiscal and monetary policies to make macroeconomic conditions
favorable for the development and competitiveness of domestic production
sectors engaged in the international trade.

In the Argentine hyperinflations of 1989 and 1990, quasi-fiscal deficits were a major part of the problem. The Central Bank's quasi-fiscal activities are financed directly by money printing but in some cases the monetary authority tries to sterilize the effect on the money supply by issuing debt or by increasing reserve requirements (it is not uncommon to pay interest on reserves when this happens). Thus, a new source of quasi-fiscal deficit arises, i.e. the interest payments on the Bank's liabilities. When nominal interest rates are high and debt reaches unsustainable levels, the interest payments can take a life of their own leading to hyperinflation. The traditional explanation is that the Central Bank has to finance the quasi-fiscal deficit through the use of the inflation tax but as inflation increases money demand drops and there is a limit to how much revenue can be collected which is determined by a Laffer curve. Trying to finance a quasi-fiscal deficit beyond that limit (or any fiscal deficit for that matter) leads to hyperinflation. In this paper we demonstrate that very high inflation can arise even if money demand is perfectly inelastic with respect to inflation and the real value of interest payments is relatively low. The key insight is that if expected inflation is a function of the current state of the economy the Central Bank has an additional incentive to alter the future state which results in higher inflation today.

Pakistan continues to suffer from a syndrome of high fiscal
deficits and severe incidence of debt. Its annual fiscal deficit has
stayed constantly at over 6 percent of GDP especially since 1990
[Pakistan (1997-98)]. The prevalence of such a high fiscal deficit over
the years in a row has propelled increased borrowing from both internal
and external sources to cover the resource gap. With inadequate
improvement in the repayment capacity of the country debt has continued
to accumulate at a massive rate. Serving as the cause and effect of each
other, the volumes of both the fiscal deficit and debt have soared
continuously. The most devastating consequence of high fiscal deficit
and soaring debt has been the continuous accrual of massive
debt-servicing. In fact, both the debt and debt-servicing have reached
unaffordable limits. How to alleviate this situation has become the
foremost issue of the country. While complete elimination of all the
debt and thereby debt-servicing may not be easy to accomplish in the
short run, efforts are needed to systematically bring the fiscal deficit
down to a minimum affordable limit. What may be the minimum financeable
level of fiscal deficit and how it may be reduced to that level are the
issues addressed in this paper.

Growing fiscal deficit and public debt has been a cause of concern for the government, economists and the policymakers of India since long. Various studies have tried to test the sustainability issue of India's fiscal policies applying various methodologies time to time. However, the results obtained are ambiguous. Such ambiguity might emerge because of the various methodologies adopted for the respective studies. In view of this, the current study attempts to revisit the sustainability issue of India's fiscal deficit using up-to-date time series methodologies on the annual data sets ranging from the time period 1981 to 2019. Apart from this, the study also tries to verify the results using a model based on fiscal reaction function (FRF) developed by Henning Bohn. The study found the fiscal deficit of India to be sustainable. JEL Classification: H61, H62, H63, H68

Inflationary performance in sub-Saharan Africa since 1996 is examined. Median inflation has tended to be higher than in other regions of the developing world, such as MENA and Latin America. Inflation is highly persistent and is higher in countries that are less politically stable, in those without hard-peg exchange rate regimes, and in those with larger fiscal deficits. Inflation has declined over time, at least at the upper end of the distribution. There is no evidence that commitment devices such as inflation targeting have reduced inflation, but in SSA the sample is confined to two countries. Inflation typically spikes after a devaluation, and is sensitive to supply-side shocks. Movements in the real price of oil and rice (but not maize) have significantly affected the inflation rate. In countries that are poor in oil and minerals and therefore more reliant on agriculture, output growth is negatively correlated with inflation, presumably because, when the harvest is good and agricultural output is high, the extra supply reduces food prices. Fiscal balances also display considerable persistence and are more favourable in resource-rich and politically stable countries and in those with hard-peg exchange rate regimes, and have improved over time.

The study aims at examining how fiscal deficits affect the performance of the stock market in India by using annual data from 1988–2012. The study makes use of Ng-Perron unit root tests to check the non-stationarity property of the series ; the Auto Regressive Distributed Lag (ARDL) bounds test and a Vector Error Correction Model (VECM) for testing both short and long run dynamic relationships. The variance decomposition (VDC) is used to predict the exogenous shocks of the variables. The findings of the bounds test reveal that the estimated equation and the series are co-integrated. The ARDL results suggest a long run negative relationship exists between budget deficit and stock prices and do not show any significant relationship in the short run. The VECM result shows that fiscal deficits influence the stock price only in the short run. The results of the Variance Decomposition show that stock price movement in the long run is mostly explained by shocks of fiscal deficits. The study implies that the government must adopt appropriate macroeconomic policies to reduce budget deficit, which will result in stock market growth and in turn will lead to the financial development of the country.

Previous research has found that the relationship between fiscal deficits and inflation is conditional on income levels: deficits tend to be inflationary in developing countries but not in advanced economies. We show that within low-income countries (LICs) the relationship is again conditional: only when relatively poor institutions fail to hold governments accountable to the general public are fiscal deficits inflationary in LICs.

This paper focuses on fiscal deficit and Nigeria's economic growth. To achieve the objective of this study diagnostic check and unit root test using Phillips perron was employed to investigate time series data and to test the stationarity of the time series of the variables. Johansen co-integration analysis and Error Correction Model (ECM) are employed to test for a relationship between or among variables. The paper concludes that the driving variables of economic growth in Nigeria were Public external debt-PEXD, total federal collection revenue-TFCR, and interest rate-INTR. The public deficit financing was determined based on the study by the variables of Government expenditure (GOVE), real GDP, exchange rate-EXCR. The best model of ECM to determine the impact of fiscal deficit in Nigeria is the interaction with economic growth performance measures in Nigeria. The findings confirm that one standard deviation of shocks of fiscal deficit has a significant influence on economic growth, hence confirming the long-run relationship. The search recommended that Government should set its priority rights, be more committed to the budget implementation, and pay more attention to capital expenditure geared towards economic growth.

This study examines impact of fiscal deficit on the growth of Nigerian economy using co-integration and error correction. Secondary data were gathered from various sources such as; the Central Bank of Nigeria statistical bulletin, economic and financial review monthly and annual reports and statement of accounts for various years. The time series property of the data employed, are first to be investigated. This is then followed by testing for co-integrated variables. From the unit root test, the results clearly indicate that the variables are integrated of the same order at first difference. Also, from the multivariate co-integration test, within the Auto-Regressive Distributed Lag (ARDL) the results indicate that there are, at most, two co-integrating vectors. This implies that there exists a stable long-run relationship between economic growth and budgeting components. From the study, it was discovered that deficit budget is one of the indicators of macroeconomic instability and significantly discourage human capital accumulation. However, recommendations are made based on the findings among which are that government should set its priorities right, be more committed to budget implementation and to pay more attention to capital expenditure geared towards growth.

The study aims at examining how fiscal deficits affect the performance of the stock market in India by using annual data from 1988-2012. The study makes use of Ng-Perron unit root tests to check the non-stationarity property of the series; the Auto Regressive Distributed Lag (ARDL) bounds test and a Vector Error Correction Model (VECM) for testing both short and long run dynamic relationships. The variance decomposition (VDC) is used to predict the exogenous shocks of the variables. The findings of the bounds test reveal that the estimated equation and the series are co-integrated. The ARDL results suggest a long run negative relationship exists between budget deficit and stock prices and do not show any significant relationship in the short run. The VECM result shows that fiscal deficits influence the stock price only in the short run. The results of the Variance Decomposition show that stock price movement in the long run is mostly explained by shocks of fiscal deficits. The study implies that the government must adopt appropriate macroeconomic policies to reduce budget deficit, which will result in stock market growth and in turn will lead to the financial development of the country.