The public debt is considered as an important indicator of the macroeconomic and financial stability of the domestic economy. It reflects a quality of the fiscal policy and the sustainability of the public finances. The public debt has been recently paid more attention in the context of the last financial and debt crisis initiated in 2008. A considerable amount of literature has been published on the topic of interconnections between budget balances and macroeconomic environment. However, the budget deficit is only a consequence of higher public expenditures than public revenues. Therefore, the debt is only an alternative source of financing the budget deficit. One of the main ideas of the doctoral thesis is that the macroeconomic effects of the fiscal policy represented by the budget deficits and effects of the public debt should differ. While activities of the fiscal policy effect the real economic indicators such as the GDP, an increase in the public debt effects the monetary indicators such as the exchange rate, the market interest rate and the money supply. The main object of the doctoral thesis is the analysis of the public debt development including the changes in the public debt structure broken down by debt instruments, currency, maturity and the holder profile. Besides, other main object is to analyse the macroeconomic effects of various forms of a public debt; firstly the attention is paid to different monetary effects of the domestic and the external public debt. The doctoral thesis suggests a new point of view to the analysis of the macroeconomic effects and sustainability of a public debt. The findings can be used in the decision making process; If a public deficit is supposed to be domestic debt or external debt financed. Apart from the effects of the changes in the outstanding debt, the effects of the changes in the public debt structure are examined.

This study examines the public debt, public debt service and economic growth nexus in Zambia, Zimbabwe and South Africa using time-series data from 1970 to 2017. This research provides empirical evidence to contribute, firstly, to the ongoing public policy debate regarding the dynamic relationship between public debt, public debt service and economic growth, and their causal relationship; and secondly, to the relative impact of domestic and foreign public debt on economic growth in the selected study countries. For this purpose, four empirical models were utilised and estimated using the Autoregressive Distributed Lag (ARDL) bounds to cointegration and the error correction ARDL-based causality test. Model 1 explored the impact of aggregate public debt on economic growth, while Model 2 investigated the relative impact of domestic and foreign public debt on economic growth. Model 3 examined the impact of public debt service on economic growth, whereas the causality between aggregate public debt and economic growth, and between public debt service and economic growth is tested in Model 4a and Model 4b, respectively. Results show that in Model 1, aggregate public debt has a positive impact on economic growth in Zambia but is negative in Zimbabwe and South Africa. In Model 2, domestic public debt negatively impacts economic growth in Zambia and Zimbabwe and positive impact in South Africa. In addition, foreign public debt has a positive impact on economic growth in Zambia and negative impact in Zimbabwe and South Africa. The results from Model 3 largely support a negative relationship between public debt service and economic growth in Zambia and Zimbabwe, and an insignificant relationship in South Africa. The causality results for Model 4a indicate that it is economic growth that drives public debt in all the study countries. Finally, no causal relationship between public debt service and economic growth was confirmed in all the study countries (Model 4b). / Economics / D. Phil. (Economics)