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How government outflow and public debt affect inflation: evidence from SEE countries
[journal article]
Abstract The study aims to address public debt and government outflow affecting inflation in some of the countries of Southeast Europe, observing a combination of factors both theoretically and econometrically. The investigation included six (6) SEE countries, including the 2006-2020 timeframe, with 90 obser... view more
The study aims to address public debt and government outflow affecting inflation in some of the countries of Southeast Europe, observing a combination of factors both theoretically and econometrically. The investigation included six (6) SEE countries, including the 2006-2020 timeframe, with 90 observations. The dynamic approach, the fixed effect, and the Arellano/Bond estimator were used to check the parameters considered in the study using panel data. Furthermore, the study also applied diagnostic tests such as the Sargan over-identifying restrictions and Pedroni test for cointegration. The results of the fixed effect and Arellano / Bond estimation demonstrate that public debt, current budget outflows, and capital budget outflows affect inflation, while overall budget outflows are insignificant. For further studies, it would be useful to apply other dynamic models by applying other specific factors, which will be considered as a useful contribution to the academic, research, and policy-making structures.... view less
Keywords
national debt; inflation; public budget; fiscal policy; Southeastern Europe
Classification
Public Finance
Free Keywords
Public Debt; Government Outflows; Panel Data; Fixed-Effect
Document language
English
Publication Year
2021
Page/Pages
p. 140-156
Journal
Journal of Liberty and International Affairs, 7 (2021) 3
DOI
https://doi.org/10.47305/JLIA2137140a
ISSN
1857-9760
Status
Published Version; peer reviewed