Fiscal Reaction Function: An Empirical Model for Bulgaria Cover Image

Функция на фискалната реакция: емпиричен модел за България
Fiscal Reaction Function: An Empirical Model for Bulgaria

Author(s): Ivailo Beev, Ivan Todorov
Subject(s): Economy, National Economy, Public Finances
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: fiscal reaction function; public debt; deficits

Summary/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.

  • Issue Year: 5/2019
  • Issue No: 5
  • Page Range: 187-201
  • Page Count: 16
  • Language: Bulgarian