Regulation of the state debt stability

Abstract

The purpose of the study is the improvement of theoretical ideas, scientific and methodological approaches to managing debt sustainability of the state and its assessment. The purpose in view caused the necessity to solve the following tasks: to carry out a decomposition analysis of the essence of the concept “debt sustainability” and identify its key determinants; to systematize the global and domestic experience of managing debt sustainability; to develop a risk-based approach to assessing debt sustainability indicators; to examine the impact of macroeconomic and financial factors on the debt sustainability of the world and Ukraine; to develop a scientific and methodological approach to identifying debt crises; to devise a structural and logical scheme for the functioning of an independent fiscal institution (IFI) in Ukraine; to improve the organizational and economic support for the implementation of fiscal (debt) rules in Ukraine; to elaborate a theoretical and methodological framework for auditing the effectiveness of the public debt. The scientific novelty of findings improved the following: scientific and methodological risk-oriented approach to the construction of an integrated indexed system for assessing the debt sustainability of the state, which provides the calculation of indices of debt sustainability in countries with different levels of income per capita at the first level and at the second level  the assessment of Ukrainian debt sustainability in terms of solvency, liquidity and vulnerability, which, unlike the existing ones, combines both static and dynamic approaches to analyzing the level of debt sustainability and allows early signaling of the risks of its loss. Methodological rationale for determining the influence of exogenous factors on the debt sustainability of the state on the basis of a system of multifactorial regression models that, unlike existing ones, consider a set of macroeconomic factors (demography and labor market, real sector, balance of payments) and financial nature (capital flows, monetary market, banking system and access to financing), and allow for a comprehensive assessment of the mechanism of mutual combination of such factors in the effects of debt spirals: “double deficit of the balance of payments is a deficit in the state budget”, “international reserves – devaluation-inflationary spiral”, “inflation – fall in industrial production and GDP”.