2. Method
Different methods were used to accomplish different tasks of the research. However, holistic approach was used
to ensure the consistency of the research.
In order to achieve the goal of the research and deliver reliable results, specific set of limitations and prerequisites
of the research should be set and specify the area of the performed research. The main research limitations include
the monetary policy arrangement, openness and size of the economy. Therefore, research focuses on economies, that
are open, small and within currency board system. The research results, respectively, are applicable only for small
open economies within currency board system. The research does not include analysis of the government borrowing
need or its management. Also, the effectiveness of the usage of borrowed assets is not analysed. The research is focused only on stabilization of the government debt which is caused by direct debt management decisions. These
limitations are also taken into account in case study, which is based on Lithuania’s example.
The following is the brief description of methods, used in the research.
Systematization and generalization of the scientific literature, as well as the generalization of the findings, was
used for the analysis of the peculiarities of a small open economy within currency board system, as well as for the
identification of peculiarities of the government debt stabilization tools and/or strategy. Qualitative analysis of the
respective primary and secondary data has been performed.
Systematic approach to the analysis is used throughout the research.
Case study is applied to study the government debt stabilization in Lithuania’s case. Data for the period of years
2004-2012 was analysed. This period was selected because before year 2004 Lithuania had significantly different
strategy of government debt management to compare it with the strategy after 2004 (in 2004 Lithuania joined
European Union). Case study employs analysis of the secondary and primary data, quantitative and qualitative
analysis of which is performed. Microsoft Office tools where used to analyse the statistical data and primary data,
@Risk 6 model was used to demonstrate the significance of the stochastic factor.
Also graphic presentation is used to illustrate the argued statements and findings. Scenario and stochastic
simulation methods are used to demonstrate the necessity for the stabilization of the government debt and the
stochastic effect on the government debt level.