FINANCING GOVERNMENT BUDGET DEFICIT: THE CASE STUDY OF FINLAND
Lamichhane, Narendra (2018)
Kuvaus
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Tiivistelmä
Studies on ‘government budget deficit financing’ have started centuries ago by Classical economists, and later continued by Keynesian economists and other schools of economists. However, each school of economists has different views; such as Classical economists are against spending whereas Keynesian are in favour of spending during the budget deficit. Study on government budget deficit gets more popular after the 2000s due to the shortfall of numerous economies around the world. The right way and absolute measures to finance government budget deficit became the hot topic around the world, and since 2008 the word ‘Debt', ‘Deficit' and ‘European Austerity' became recurring terms in the media. Various scholars studied the ‘effects of' and ‘solution to' budget deficit but only a handful of studies are conducted covering all the major budget deficit financial instruments emphasizing economic growth.
Concepts, effects and financing instruments of budget deficit are discussed in the literature review of this thesis. At the end of the literature review, financing government budget deficit with ‘economic growth' approach is presented. In addition, the theoretical part includes the previous study, theoretical framework, and propositions for the analysis part. Next, a case study method is elaborated before the analysis part. Research is based on a single case study i.e. case study of Finland. Case study part contributes to existing government budget deficit literature with robust findings and provides new insights. As a practical implication, government and public manager of present and future can learn from this thesis. Economists and researchers can also use this thesis as the information source of Finnish budget deficit financing.
Case country, ‘Finland’ has been selected carefully which absolutely fits on budget deficit scenario because Finland is running its budget on the deficit since 2009. All the required information for case analysis were available in web source, government publications, in other academic sources, and media source. Case study method is used as an analysis method, and case data and information are gathered through the secondary sources. Cross-analysis with other countries especially with the USA can be found in some part of the case study and literature, however, main case study only includes the budget deficit behavior of Finland; and analysis method is not cross-analysis. Therefore, all the findings are based on Finnish budget deficit scenario and activities from 2009 to 2018.
This study contributes to numerous interesting and essential findings. First, the budget deficit scenario of Finland along with the effects of the budget deficit is identified. The role of economic growth in financing budget deficit as a sustainable method is strongly emphasized in this study. This study findings also include the factors of economic growth which promote economic sustainability. The most interesting finding of this thesis is the impact of innovation in sustainable economic growth which can be a breakthrough for any country in reinstating its economy, especially in a current global economic scenario. Furthermore, it is also found that the Finnish government is well familiar with economic growth but is still unable to innovate any significant idea or to make any breakthrough to fix its sustainability gap totally. Last, the case study findings evaluate the budget deficit financing instruments where the contribution of economic growth in financing government budget deficit is found crucial.
Concepts, effects and financing instruments of budget deficit are discussed in the literature review of this thesis. At the end of the literature review, financing government budget deficit with ‘economic growth' approach is presented. In addition, the theoretical part includes the previous study, theoretical framework, and propositions for the analysis part. Next, a case study method is elaborated before the analysis part. Research is based on a single case study i.e. case study of Finland. Case study part contributes to existing government budget deficit literature with robust findings and provides new insights. As a practical implication, government and public manager of present and future can learn from this thesis. Economists and researchers can also use this thesis as the information source of Finnish budget deficit financing.
Case country, ‘Finland’ has been selected carefully which absolutely fits on budget deficit scenario because Finland is running its budget on the deficit since 2009. All the required information for case analysis were available in web source, government publications, in other academic sources, and media source. Case study method is used as an analysis method, and case data and information are gathered through the secondary sources. Cross-analysis with other countries especially with the USA can be found in some part of the case study and literature, however, main case study only includes the budget deficit behavior of Finland; and analysis method is not cross-analysis. Therefore, all the findings are based on Finnish budget deficit scenario and activities from 2009 to 2018.
This study contributes to numerous interesting and essential findings. First, the budget deficit scenario of Finland along with the effects of the budget deficit is identified. The role of economic growth in financing budget deficit as a sustainable method is strongly emphasized in this study. This study findings also include the factors of economic growth which promote economic sustainability. The most interesting finding of this thesis is the impact of innovation in sustainable economic growth which can be a breakthrough for any country in reinstating its economy, especially in a current global economic scenario. Furthermore, it is also found that the Finnish government is well familiar with economic growth but is still unable to innovate any significant idea or to make any breakthrough to fix its sustainability gap totally. Last, the case study findings evaluate the budget deficit financing instruments where the contribution of economic growth in financing government budget deficit is found crucial.