International Journal of Science, Technology & Management www.ijstm.com Volume No 04, Special Issue No. 01, March 2015 ISSN (online): 2394-1537 102 | Page AN ECONOMETRIC ANALYSIS OF PUBLIC DEBT IN ALBANIA Prof.As.Dr. Valentina Sinaj Economics Faculty,Tirana Albania ABSTRACT Despite the global economic crisis, our country managed to maintain a stable level of economic growth, but the high level of public debt, with an increasing trend over the last three years, is seen as very disturbing on many domestic and foreign economists. In this paper will be analyzed the public debt and economic growth. It is used unitary root test to study the series stationarity and the Granger causality test to detect links between them. With the help of econometric methods it is built for Albania, the economic growth model depending on public debt. Granger theorem shows that the negative impact of public debt on economic growth that exists in periods. Keywords: Growth, Public Debt, Granger, Modeling. I. INTRODUTION This study aims at establishing a relationship between sustainability and management of public debt, both very important issues currently, and very strategic components of public policies of a country. The aim is to analyze the relationship between public debt and some macroeconomic variables, using econometric modeling techniques. A deeper analysis takes place between public debt as a quote of GDP (%) and economic growth as a quote of GDP (%), by applying econometric models.The results of the current research emphasize the role of debt management in achieving its sustainability and also prove that the link between economic growth and public debt is inversely and moderately strong, according to the results obtained after the application of an one factorial econometric model. There are few empirical studies that demonstrate that public external debt and its structure can influence the reduction of public debt stability. In a very similar form other researchers have shown that, according to the debt structure, after the maturity date, a very high volume of short-term debt can generate crises in countries that have constant need for liquidity. As part of public policy, debt management is a process of stabilization and application of strategies used in the management of government debt, in the collection of necessary funds, in establishing a balance between cost and risk objectives and achieving any goal set by the government. Every government faces strategic choices relationated with: debt management objectives, risk border, part of the government's responsibilities to engage with public debt management, how to manage liabilities, (which can be transformed into financial obligations and if consistency, management and public debt policies materialize in guarantees for loans in foreign currency) and provide a stable governance for public debt management. Also, for a good management of public debt, oriented to ensure fiscal sustainability in the longer term, there should be a legal and institutional basis sustainable. Different authors have determined different definitions for the sustainability of public debt. According to their sustainability has to do with stability and optimal level of public debt.