Public debt management in Serbia during transition, Great Recession and COVID-19 pandemic

This paper examines the nonlinear asymmetric behaviour of the public debt/GDP ratio in Serbia in the first two decades of economic transition following the political and market reforms started at the beginning of the twenty-first century. Using quarterly data for the government debt-to-GDP ratio, a two-regime self-exciting threshold autoregressive (SETAR) model of order one finds a public debt/GDP ratio threshold of 66.2% above which fiscal policymakers in Serbia take corrective action in the form of increased fiscal prudence. The estimated government debt/GDP ratio threshold corresponds to a 60% threshold from the Maastricht fiscal criteria and shows how fiscal authorities in Serbia systematically ignore the 45% public debt/GDP limit set in the national fiscal rules. Such fiscal policy behaviour could jeopardize the credibility of fiscal institutions in Serbia and have a negative impact on fiscal discipline and the likelihood of sovereign default.

• Publication year

  2024

• Venue

  Serbian Journal of Management

• Publication date

  Unknown publication date

• Fields of study

  Not labeled

• Identifiers
  DOI 10.5937/sjm19-52982
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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