The issue of forecasting the limits of the national debt

Abstract

The major focus of this paper is on a number of factors that determine the acceptability of the national debt as well as its optimal and effective management. Borrowing is one of the easiest methods for governments to cover the budget deficit, though the government borrowing made in attempt to support the development of economy cannot be viewed as an issue separate from the state's fiscal and monetary policy. The author analyzes the interaction between the national debt and the budget deficit. Within the framework of the mathematical model covered in detail, the author proposes the evaluation of the debt limits of the Lithuanian government by drawing on principle economic aviarables. [...].