Fiscal Deficits, Public Debt, and Macroeconomic Stability in Developing Economies
Keywords:
Fiscal deficit, public debt, macroeconomic stabilityAbstract
Fiscal deficits and rising public debt have become persistent features of developing economies, particularly in the post-pandemic period. This study examines the relationship between fiscal deficits, public debt levels, and macroeconomic stability in developing countries. Using panel data from 2015–2023 across 20 developing economies, the analysis finds that moderate fiscal deficits can support economic growth, but excessive public debt is associated with inflationary pressures and output volatility. The findings highlight the importance of fiscal discipline and counter-cyclical policy frameworks for sustaining macroeconomic stability.
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