SUSTAINABILITY OF GOVERNMENTS DEBT

The main objective of this paper is to analyse the government debt sustainability and stabilization in a small open economy. Sustainability of government's debt is one of the key priorities of almost every country. Under ideal conditions, government's debt should be sustainable at all times. For that reason, government should use debt stabilization tools to sustain the government debt or at least maintain it at acceptable level. Selection of appropriate stabilization tools depends on many different factors. Used research methods are systematization and generalization of the scientific literature and the qualitative and quantitative analysis of the primary and secondary data. At the end of the paper is brief review of the main results and findings concerning debt sustainability and stabilization in a small open economy.