IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 10 NO. 10 2024
DOI: 10.56201/ijebm.v10.no10.2024.pg84.95

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Public Debt Management Strategies in An Open Economy

Obiukwu Nwanyioma Jessica, Obiukwu Sandralyn Ifeoma, Cynthia C.F. Dikeogu-Okoroigwe, Okonkwo N. Osmond

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Abstract

The study examines the impact of debt sustainability on long-term economic growth in open economies, focusing on sound debt management practices. Key factors influencing debt management include fiscal policy, external shocks, capital flow volatility, and institutional capacity. The research uses theoretical frameworks like Ricardian Equivalence, Keynesian perspectives, and the Debt Overhang Theory to understand their implications. Successful strategies include diversifying debt instruments, building foreign exchange reserves, and implementing robust fiscal rules. The study also emphasizes the importance of debt transparency, strengthening institutional frameworks, and fostering macroeconomic stability through sound fiscal and monetary policies. Countries with effective debt management frameworks, supported by structural reforms and prudent fiscal policies, are better positioned for sustainable growth. The study concludes with policy recommendations for promoting fiscal discipline, enhancing debt sustainability, and supporting long-term economic growth in open economies.

keywords:

Public Debt, Debt Sustainability, Open Economy, Fiscal Discipline, Debt

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