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• The possibilities and impossibilities of Hungarian public debt

  26-42

  Laszlo Torok

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  The topic of the present study is the hypothetical, ex ante nature examination of Hungary’s gross consolidated public debt. The study defines the most important concepts and correlations, the judgments on the different degrees of public debt, the development of the Hungarian public debt, its main stages and characteristics. The study then presents a macroeconomic framework, which can predict the future output values of the public debt commensurable to GDP, depending on the parameters of the main explanatory variables. The establishment of input values of the main macroeconomic aggregates, as endogenous variables, is based on the author’s extrapolation and other empirical studies. Applying these, the values of the future public debt rates can be forecasted. The present study intends to show that the explanatory (economic) variables currently have well established values, which, if inserted into the chosen macroeconomic forecasting framework, show that the Hungarian public debt compared to GDP can be reduced to the desired 50 percent level. As the result of ten scenarios a more or less pessimistic, but in the case of one scenario, an optimistic, picture emerged concerning the future state of gross public debt.

  Journal of Economic Literature (JEL) classifications: C53, H68