IDEAS home Printed from https://ideas.repec.org/a/dug/actaec/y2018i7p693-711.html
   My bibliography  Save this article

Public Debt and the Budget Deficit in Kosovo

Author

Listed:
  • Vese Qehaja

    (University of Gjilan)

  • Driton Qehaja

    (University of Prishtina “Hasan Prishtina”)

Abstract

TThis paper explores the relationship between the budget deficit and public debt, as well as their effects on GDP in Kosovo during the period 2010 to 2018. The choice of period was guided by data availability for Kosovo’s public debt. Up until 2010, Kosovo did not have a legal framework that would allow the general Government to have domestic debt, and the budget had no source of finance other than its own tax and non-tax revenues. In the period up to 2018 the share of public debt and budget deficit in GDP did not exceed the margin of 40 per cent and 2 per cent, respectively, prescribed by the fiscal rule. The aim of the paper is to determine the empirical relationship between Kosovo’s public debt and budget deficit in macroeconomic terms. The paper also estimates the correlation between public debt and budget deficit, as well as its components. The methodology used is based on the econometric analysis of regression over time series (OLS). Using these data, a model is generated to examine the relationship between public debt as a dependent variable of the deficit and interest payments on debt repayment. Our main finding is that when the budget deficit increased by 1 per cent, the public debt increased by 4.96 per cent, and when GDP increased by 1 per cent, the budget deficit grows by 0.25 per cent.

Suggested Citation

  • Vese Qehaja & Driton Qehaja, 2018. "Public Debt and the Budget Deficit in Kosovo," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(7), pages 693-711, DECEMBER.
    • Handle: RePEc:dug:actaec:y:2018:i:7:p:693-711
    as

    Download full text from publisher

    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/5111/4805
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:actaec:y:2018:i:7:p:693-711. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Robu (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.