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Public debt and economic growth
Published: March 25, 2015

On Wednesday, 25 March 2015 the Institute of Public Finance hosted a lecture by Robert Sonora (School of Business Administration, Fort Lewis College, Durango, Colorado) entitled Public debt and economic growth: new evidence.

One of the key assumptions implied in the majority of studies is that lower economic growth is spurred by high debt, but not the reverse. However, if reverse causality holds, the usual estimation of the model can yield biased estimators because of a feedback effect. Sonora’s results show that the inter-temporal causal relationship is bi-directional which provide a warning regarding the estimation results in many previous studies that have ignored the role of the feedback effect. He checked the robustness of estimated thresholds in the relationship between public debt and GDP growth using a variety of dynamic panel methods and datasets to address the issue of endogeneity, feedback and endowment effects. The main conclusion is that there is no “absolute” threshold which holds for all countries and for all times. However, it does not mean that individual countries do not have their own thresholds.

Oil price developments and government budget revenues in Croatia
Published: March 23, 2015

In new Newsletter entitled Oil price developments and government budget revenues in Croatia, Petar Sopek and Ivan Škoc tried to clarify the impact of crude oil prices on the government budget revenues – from excise duties and VAT.  The crude oil market recorded a significant decline in prices in the second half of 2014, which led to a fall in the retail price of petrol and diesel on the Croatian market as well. In mid-February 2015, Eurosuper 95 came to 9.32 HRK per liter and Eurodiesel to 8.84 HRK. Since then fuel prices have slightly increased, primarily due to the increase of crude oil prices and a stronger HRK/USD exchange rate. Therefore, the average price of petrol on 8 March 2015 was 9.56 HRK/l and 9.01 HRK/l for diesel. Compared to the average retail price from 2014, prices in March 2015 were still on average 10% lower. The analysis shows that lower fuel prices in the long run should not have a negative impact on the revenues of the government budget due to positive price elasticity of demand, the effect of redistribution of revenues from VAT and lower public sector own expenditures.


The Prof. Dr. Marijan Hanžeković Trust announces its competition for the award of the annual prize for 2015.

Croatian and foreign nationals have the right to submit works in the regular prize category. Papers, in Croatian or in English, must be submitted by June 1, 2015 at the latest. The papers must be accompanied by an application form. All the entrants have to satisfy the terms of the competition. More...


Osnove upravljanja javnim dugom
Published: 2011
ISBN: 978-953-7613-47-1
Osnove upravljanja javnim dugom is a university textbook that deals with the understanding of the concept, structure and techniques of issuing public debt...
Press Releases
In the Press release named Everything is like last year - we do not have the public debt management strategy? Anto Bajo and Marko Primorac point at the fact that the borrowing was done without the clear borrowing plan and public debt management strategy.

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