We invite you to the 23rd Brown Bag Seminar to be held on Jan. 27, 2020, at the Faculty of Economics and Business in Zagreb in Hall 51 starting at 2 pm
The cycle of the Brown Bag Seminar will be continued by Ms. Milena Radonjić from the Faculty of Economics in Podgorica, University of Montenegro, who will present the paper "Public Debt Dynamics in the Western Balkans: Are Social Expenditure and Economic Growth Important?".
Summary of the presentation:
The aim of this paper is to examine the determinants of public debt in the Western Balkan countries, focusing on the effects of economic growth and social spending. The study covers the period 2006-2017 and a dynamic panel analysis is applied. The results suggest that an incremental change in growth significantly reduces debt, while social spending pushes the debt-to-GDP ratio higher. Also, there is a negative relationship between inflation and debt, while interest payments on the previous borrowing add to public debt. Finally, unemployment in this model is not statistically significant. The main implication of the study is that policymakers in these countries should favor growth-oriented policies and performance-oriented social reforms to keep public debt sustainable in the long run.
