Public debt can be defined as the accumulated borrowings of the state, i.e. the sum of all claims that its creditors have upon the public sector at any given moment. Expenses financed by borrowing become accumulated budgetary deficits. And a deficit is nothing but the excess of budgetary expenditure over revenue during a given period of time. Irrespective of the scope of government and the revenue and expenditure from which it is calculated, a deficit is in the long run a normal mathematical difference (remainder). Thus the impact of a deficit (and public debt) on an economy, and their interaction with other economic variables necessarily have to be looked at in the context of a given fiscal policy.
In 2000, the Institute for Public Finance presented the project "Public Debt in the Republic of Croatia" with the aim of providing a general insight into the issue of deficit and public debt, as well as identifying specific Croatian problems and providing guidelines for solving them.
The project addressed and investigated topics from the theory of consequences of fiscal deficit and public debt; links between fiscal policy instruments, GDP and other macroeconomic variables; impact analyses of fiscal deficit and public debt on economic growth; political and institutional aspects of fiscal deficit and public debt; and the sustainability of the government borrowing policy.
The articles were published in the journal Financijska teorija i praksa, no. 1/2001.