INSTITUTE OF PUBLIC FINANCE
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The Press Release titled Fiscal Effects of Reducing Public Service Employees' Rights, features Anto Bajo's comments on the proposals for an “Act on Amendments to the Act on Denial of the Right to Increase Salaries Based on Seniority”, and “Act on Denial of the Payment of Certain Material Rights to Public Service Employees”, which are currently in parliamentary procedure. Both proposals relate to the Government’s measures to reduce huge general government budget deficit.
In the Press Release titled Tax Information Exchange with the United States, Irena Klemenčić gives a brief account of the intergovernmental agreement on the implementation of the US Foreign Account Tax Compliance Act (FATCA), signed on March 20, 2015 by the Croatian finance minister Boris Lalovac and the US ambassador to Croatia Kenneth H. Merten.
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.
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...