Fiscal Reaction Function: An Empirical Model for Bulgaria

Authors

  • Assoc. Prof. Dr Ivailo Beev Department of Economics, Faculty of General Economics, UNWE Author
  • Senior Assist. Prof. Dr Ivan Todorov Department of Economics, Faculty of General Economics, UNWE Author

Keywords:

Fiscal reaction function, Deficits, Public debt
H62, H63

Abstract

The study presents the systematic response of fiscal policy to public debt developments, aiming to reveal its crucial importance in determining whether the debt-to-GDP dynamics leads to a desired equilibrium or not. On this basis, we will show that the values ??of the debt-to-GDP ratio in Bulgaria close to 55-60% are an acceptable boundary where debt can be considered as manageable and sustainable. These calculations contribute as they give new directional ideas when measuring the fiscal effects of fiscal policy, they can also serve as an anchor for various stress testing scenarios as well as an analysis of the social expenditures outweighing in the future.

References

D Barr, O Bush, A Pienkowski - Life After Debt: The Origins and …, 2014 (2014). GDP-linked bonds and sovereign default. URL: https://link.springer.com/chapter/10.1057/9781137411488_16

D Barr, O Bush, A Pienkowski - Life After Debt: The Origins and …, 2014 (2014). GDP-linked bonds and sovereign default. URL: https://link.springer.com/chapter/10.1057/9781137411488_16

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Published

2020-03-06

Issue

No. 5 (2019)

Section

Articles

License

Copyright (c) 2019 Ivailo Beev, Ivan Todorov (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain copyright to their works.

All publications are distributed under the terms of the Creative Commons Attribution 4.0 International (CC BY 4.0) license.

How to Cite

Beev, I., & Todorov, I. (2020). Fiscal Reaction Function: An Empirical Model for Bulgaria. Research Papers, 5, 187-201. https://bjiep.e-dnrs.org/index.php/rp/article/view/5421