Government Debt Research Papers - Academia.edu (original) (raw)

Government debt is one of the most important variables monitored in the European economies of 21th century. Due to Euro Convergence Criteria, it is most often calculated as a ratio of government debt-to-Gross Domestic Product (D/GDP).... more

Government debt is one of the most important variables monitored in the European economies of 21th century. Due to Euro Convergence Criteria, it is most often calculated as a ratio of government debt-to-Gross Domestic Product (D/GDP). However, this ratio does not have clear economic interpretation and is difficult to understand for the common voter. In this paper, we suggest a new, more appropriate indicator – Government debt-to-Net Wealth of Households (D/NWH), which is inspired by the one-off wealth tax. Using high quality data from the Czech Statistical Office, Eurostat and Wiener Institut für Internationale Wirtschaftsvergleiche the debt burden imposed on the every Czech household was computed. While in 1995 the D/NWH was less than 7%, it has more than tripled by the end of 2012. If the Czech Republic was to repay its government debt immediately, it would have to impose a one-off tax of a quarter of the every household’s wealth. While it has been argued that the 60% threshold of D/GDP is an artificial ratio introduced by Maastricht Treaty, D/GDP reaching 182% (which is roughly the recent government debt of Greece) would be the critical insolvency level for the Czech Republic.

This paper reviews recent developments in the management of government debt in the euro area, covering both theoretical and practical aspects. It focuses on key aspects of debt management; the objectives of debt management, its... more

This paper reviews recent developments in the management of government debt in the euro area, covering both theoretical and practical aspects. It focuses on key aspects of debt management; the objectives of debt management, its organisation, the maturity of debt, inflation-indexation, currency-denomination, the ownership of debt, and debt issuing and trading practices. Main adjustments include an increase in autonomy of

The group of duration models has grown rapidly during last years, offering manynew approaches for interest rate risk management in delta or delta-gamma frameworks.This paper attempts to make up for the lack of empirical evidence... more

The group of duration models has grown rapidly during last years, offering manynew approaches for interest rate risk management in delta or delta-gamma frameworks.This paper attempts to make up for the lack of empirical evidence concerning theperformance of some of the most realistic duration models in interest rate riskmanagement by analyzing their effectiveness to immunize fixed income portfolios. Tothis end, the paper focuses on a major European market that has registered intenseinterest rate shifts during the nineties, the Spanish government debt market. Our resultsshow that (i) traditional immunization is easily surpassed by more realistic strategies;(ii) the number of risk factors has a greater influence on the result than the particularmodel chosen; and (iii) three-factor immunization strategies offer the highestimmunization benchmarks. Los modelos de duracion han experimentado una profunda revision en los ultimos anos que ha dado lugar a la coexistencia de numerosos enfoques...

The study examined the impact of government debt on economic growth through extensive review of relevant theoretical and empirical literature. Governments borrow to cover budget deficits. The debt is obtained either from the domestic... more

The study examined the impact of government debt on economic growth through extensive review of relevant theoretical and empirical literature. Governments borrow to cover budget deficits. The debt is obtained either from the domestic market or from external sources. Government debt by Greece proved to be bad for the economy while government debt by USA which has the highest debt in the world proved to be manageable. This led to the need to examine the impact of government debt on economic growth in Kenya. The major theories examined included Adolph Wagner's law of increasing state activity, the debt overhang theory, crowding out theory and the Ricardian equivalence theory. The main objective of the critical literature review was to review the literature done on the impact of government debt on economic growth while the specific objectives were to examine the impact of government debt on economic growth, to investigate the effects of macroeconomic variables on the relationship between government debt and economic growth, to establish the effects of regulatory reforms on the relationship between government debt and economic growth, and to review the joint effect of macroeconomic variables and regulatory reforms on government debt and economic growth. The majority of the findings from the literature reviewed on government debt indicated that there was an impact of government debt on economic growth; some showed a positive economic growth while others showed a negative economic growth.

Over the past 25 years, India’s economy grew at an average real rate of close to 6 percent, yet by the end of this period, the general government debt-to-GDP ratio was 34 percentage points higher. We examine the links between the public... more

Over the past 25 years, India’s economy grew at an average real rate of close to 6 percent, yet by the end of this period, the general government debt-to-GDP ratio was 34 percentage points higher. We examine the links between the public finances and growth in the post-1991 period. The persistent combination of high growth and high fiscal deficits appears

The management of government debt and assets has important implications for fiscal positions. Debt managers aim to secure non-interrupted funding at lowest medium-term costs subject to risks. Massive crisis-related increases in government... more

The management of government debt and assets has important implications for fiscal positions. Debt managers aim to secure non-interrupted funding at lowest medium-term costs subject to risks. Massive crisis-related increases in government debt in most OECD countries and increased risks on the asset side of government balance sheets may imply attaching a larger weight to avoiding risk than prior to

With a new quarterly dataset we estimate a Bayesian Structural Autoregression model and a Fully Simultaneous System approach to analyze the macroeconomic effects of fiscal policy. Results show that positive government spending shocks, in... more

With a new quarterly dataset we estimate a Bayesian Structural Autoregression model and a Fully Simultaneous System approach to analyze the macroeconomic effects of fiscal policy. Results show that positive government spending shocks, in general, have a negative effect on real GDP; lead to “crowding-out” effects of private consumption and investment; have a persistent and positive effect on the price level and a mixed impact on the average financing cost of government debt. Explicitly considering the government debt dynamics in the model is also important. A VAR counter-factual exercise confirms that unexpected positive spending shocks create relevant “crowding-out” effects.

Over the past 25 years, India's economy grew at an average real rate of close to 6 percent, with growth rates in recent years accelerating to 9 percent. Yet by 2005-06, the general government debt-to-GDP ratio was 34 percentage points... more

Over the past 25 years, India's economy grew at an average real rate of close to 6 percent, with growth rates in recent years accelerating to 9 percent. Yet by 2005-06, the general government debt-to-GDP ratio was 34 percentage points higher than in the 1980s. The authors examine the links between public finances and growth in the post-1991 period. They

Over the years, the world has experienced increased and persistent levels of high government debts. This situation has been fuelled by the sluggish economic growth rates and weak revenue collections, particularly in the sub-Saharan... more

Over the years, the world has experienced increased and persistent levels of high government debts. This situation has been fuelled by the sluggish economic growth rates and weak revenue collections, particularly in the sub-Saharan region. Using the auto-distributive lag (ARDL) model, the study investigates the key drivers of government debt in South Africa from 1994 to 2017. Findings of this study revealed that there is long-run relationship between government debt and government expenditure, real GDP, inflation and real interest rates, with government expenditure, real GDP and interest rates being the key drivers of government debt in South Africa. Government debt has had a negative impact on economic growth and inflation. In the short run, there are no significant interactions between inflation, real interest rates and government debt. To reduce government debt, the South African government should lean towards improving its productive capacity, controlling interest rates and eliminating non-productive expenditure. Factors such as bailout spending on non-performing and problematic state entities may be avoided by opening for competition to ease the burden off the state as a sole or main funder.

The paper analyses the impact of structural reforms on external positions in monetary union in a 3-region version of QUEST III. Wage cost moderation and fiscal consolidation improve the current account balance in the medium term, but... more

The paper analyses the impact of structural reforms on external positions in monetary union in a 3-region version of QUEST III. Wage cost moderation and fiscal consolidation improve the current account balance in the medium term, but positive income effects tend to offset the initial increase in the long term. The general pattern is robust across alternative levels of initial

Outstanding of local government bonds in Japan has increased rapidly after the 1990s, and now reached the highest level. It is important to reduce and manage not only the outstanding amount of national government bonds but also local... more

Outstanding of local government bonds in Japan has increased rapidly after the 1990s, and now reached the highest level. It is important to reduce and manage not only the outstanding amount of national government bonds but also local government bonds. We can find that the change of the management system of local government bonds in advanced countries because of decentralization and increasing of the government debt in recent years. This paper discusses the international comparison of fiscal discipline of local governments and the characteristics of local government bond systems in the United States and France studied through local survey. We also model economic institutions behind Japanese local government bond issues and more market-oriented system behind the US local government bond and draw welfare implications from the comparison of Japanese and the US systems. Japanese system requires the permission of issuing from the central government which determines the use of funds raised...

This paper addresses the question of whether the European Monetary System can be copied outside Europe. Our answer is negative. The EMS is just one element of a more comprehensive design of institutional integration within Europe: the... more

This paper addresses the question of whether the European Monetary System can be copied outside Europe. Our answer is negative. The EMS is just one element of a more comprehensive design of institutional integration within Europe: the presence of the European Economic Community, and the dependence of EEC institutions upon exchange rate stability lend credibility to EMS exchange rate targets in a way that would not be present. say, among the United States, Europe and Japan. The EMS has also reproduced previous experiences of fixed exchange rates by not imposing the exchange rate constraint symmetrically upon all member countries: the system has de facto worked as a DM-zone, thus confirming that the institution of fixed rates pg cannot induce international monetary cooperation. Finally, the differences in the use of the inflation tax among European countries and the divergent behavior of government debt after 1979 indicate that the pursuit of monetary convergence among countries with ...

Bulgaria is far below its optimum level of government debt and can borrow, but only to finance effective public investment. Not for eating and drinking, as in recent decades. / България е далеч под оптималното си ниво на държавен дълг и... more

Bulgaria is far below its optimum level of government debt and can borrow, but only to finance effective public investment. Not for eating and drinking, as in recent decades. / България е далеч под оптималното си ниво на държавен дълг и може да взема заеми, но само за финансиране на ефективни публични инвестиции. Не за ядене и пиене, както в последните десетилетия.