Abstract:
Deficit budget, public debt, as well as interest rate of advanced and emerging countries are
compared in this study. The study employ data of 30 developed countries and 29 emerging
cOllntries in period 2006 to 2011. Data is obtained from IMF
The descriptive method is used dominantly in the study. The study finds that the
advanced countries conduct more dominant fiscal policy than the emerging countries.
Furthermore, the ratio of public debt per GDP of developed countries also greater than the
public debt of emerging countries. However, the percentage of interest payment in the
government budget and in the GDP of emerging cOlin tries is higher than the developed
countries. The situation existed because the interest rates that must be paid by emerging
countries are greater than developed countries. If developed countries conduct public debt
that requires same ratio of interest payment like emerging countries, the developed
countries will have the public debt three times more than the debt of emerging countries.
Based on the result, it can be concluded that emerging countries have weaker ability using
public debt financial budget deficit than the advanced countries.
Keywords: deficit budget, public debt, interest rate.
