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Author : Valeriano F. García
Publisher : World Bank Publications
Page : 42 pages
File Size : 50,8 Mb
Release : 1997
Category : Debt
ISBN : 8210379456XXX
Author : F. Valeriano Garcia
Publisher : Unknown
Page : 128 pages
File Size : 55,7 Mb
Release : 1999
Category : Electronic
ISBN : OCLC:913715806
June 1997 Anything policymakers can do to increase the demand for base money will help solve public debt problems. Key (related) factors in an analysis of debt sustainability should include: * The demand for base money (or high-powered money). * Projected fiscal balance. * The real interest rate. * The rate of income growth. Garcia emphasizes the demand for base money, a variable that has received scant attention in the literature of fiscal debt sustainability. Given a constant base multiplier, the demand for real base money goes hand-in-hand with the demand for money. In fact, if we adjust the stock of money for changes in the base multiplier, shifts in the monetary base have to mirror changes in the money stock; and anything that changes the demand for money will also change the demand for base money. Consequently, a change in the expected cost of holding money, a change in permanent income, or a change in regime-which would no doubt affect the demand for real money-would also affect the real stock of base money. Naturally, base multipliers are not constant and more research on the relative stability of base money in debt ridden countries is warranted. Real interest rates are also important. Many Latin American countries have issued domestic bonds to sterilize the effect of capital inflows on the real exchange rate and, consequently, have significantly increased their real interest rate burden affecting their debt sustainability. Permanently increasing the fiscal surplus would improve debt sustainability if other variables remain unchanged. Furthermore, Garcia claims that a permanent increase in the fiscal primary surplus through expenditure reduction would have an important effect on debt sustainability because it would reduce real interest rates (less crowding out), increase income growth (allocation effect), and increase demand for monetary base (reduced inflation expectations and higher expected income growth). This paper - a product of the Economic Adviser's Unit, Latin America and the Caribbean, Office of the Regional Vice President - is part of a larger effort in the region to address debt and fiscal issues.
Author : Valeriano F. Garcia
Publisher : Unknown
Page : 37 pages
File Size : 42,9 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1290705724
Anything policymakers can do to increase the demand for base money will help solve public debt problems. Key (related) factors in an analysis of debt sustainability should include:The demand for base money (or high-powered money).Projected fiscal balance.The real interest rate.The rate of income growth.Garcia emphasizes the demand for base money, a variable that has received scant attention in the literature of fiscal debt sustainability. Given a constant base multiplier, the demand for real base money goes hand-in-hand with the demand for money. In fact, if we adjust the stock of money for changes in the base multiplier, shifts in the monetary base have to mirror changes in the money stock; and anything that changes the demand for money will also change the demand for base money.Consequently, a change in the expected cost of holding money, a change in permanent income, or a change in regime - which would no doubt affect the demand for real money - would also affect the real stock of base money. Naturally, base multipliers are not constant and more research on the relative stability of base money in debt ridden countries is warranted. Real interest rates are also important. Many Latin American countries have issued domestic bonds to sterilize the effect of capital inflows on the real exchange rate and, consequently, have significantly increased their real interest rate burden affecting their debt sustainability. Permanently increasing the fiscal surplus would improve debt sustainability if other variables remain unchanged. Furthermore, Garcia claims that a permanent increase in the fiscal primary surplus through expenditure reduction would have an important effect on debt sustainability because it would reduce real interest rates (less crowding out), increase income growth (allocation effect), and increase demand for monetary base (reduced inflation expectations and higher expected income growth).This paper - a product of the Economic Adviser's Unit, Latin America and the Caribbean, Office of the Regional Vice President - is part of a larger effort in the region to address debt and fiscal issues.
Author : Alfred Greiner,Bettina Fincke
Publisher : Springer
Page : 284 pages
File Size : 45,7 Mb
Release : 2014-10-14
Category : Business & Economics
ISBN : 9783319093482
Public debt has become a severe problem for a great many economies. While the effects of tax policies on the allocation of resources are readily derived, the mechanisms that make public deficits and debt influence the economy are not so easily understood. This book elaborates on the effects of public debt starting from the intertemporal budget constraint of the government. It is shown under which conditions a government can stick to the intertemporal budget constraint and then, demonstrated how public debt affects the growth process and welfare in market economies. The effects are derived for models with complete labor markets as well as taking into account labor market imperfections. The focus in this book is on fiscal policy issues, but it also deals with monetary policy aspects. The theoretical analysis is complemented with empirical time series analyses on debt sustainability and with panel studies dealing with the relationship between public debt and economic growth.
Author : Benno Ferrarini,Raghbendra Jha,Arief Ramayandi
Publisher : Routledge
Page : 227 pages
File Size : 43,7 Mb
Release : 2012
Category : Business & Economics
ISBN : 9780415522212
Addressing the global financial crisis has required fiscal intervention on a substantial scale by governments around the world. The consequent buildup of public debt, in particular its sustainability, has moved to center stage in the policy debate. If the Asia and Pacific region is to continue to serve as an engine for global growth, its public debt must be sustainable. Public Debt Sustainability in Developing Asia addresses this issue for Asia and the Pacific as a whole as well as for three of the most dynamic economies in the region: the People’s Republic of China, India, and Viet Nam. The book begins with a discussion of the reasons for increased attention to debt-related issues. It also introduces fiscal indicators for the Asian Development. Bank’s developing member countries and economies. The sustainability of their debt is assessed through extant approaches and with the most up-to-date data sources. The book also surveys the existing literature on debt sustainability, outlining the main issues related to it, and discusses the key implications for the application of debt sustainability analysis in developing Asia. Also highlighted is the importance of conducting individual country studies in view of wide variations in definitions of public expenditure, revenues, contingent liabilities, government structures (e.g., federal), and the like, as well as the impact of debt on interest rates. The book further provides in-depth debt sustainability analyses for the People’s Republic of China, India, and Viet Nam. Public Debt Sustainability in Developing Asia offers a comprehensive analytical and empirical update on the sustainability of public debt in the region. It breaks new ground in examining characteristics that are crucial to understanding sustainability and offers richer policy analysis that should prove useful for policymakers, researchers, and graduate students.
Author : International Monetary Fund,World Bank
Publisher : International Monetary Fund
Page : 39 pages
File Size : 47,6 Mb
Release : 2003-09-12
Category : Business & Economics
ISBN : 9781498328920
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Author : Craig Burnside
Publisher : World Bank Publications
Page : 312 pages
File Size : 43,8 Mb
Release : 2005
Category : Business & Economics
ISBN : 082135874X
Topics discussed in this publication include: an introduction to theoretical and practical aspects of fiscal sustainability; theoretical prerequisites for fiscal sustainability analysis; debt indicators in the measurement of vulnerability; cyclical adjustment of budget surplus; pro-cyclical fiscal policy using Mexico's fiscal accounts as a case study; fiscal rules and the experience of Chile; currency crises and models for deal with financing costs.
Author : S. Ali Abbas,Alex Pienkowski,Kenneth Rogoff
Publisher : Oxford University Press
Page : 288 pages
File Size : 53,5 Mb
Release : 2019-10-21
Category : Business & Economics
ISBN : 9780192591401
The last time global sovereign debt reached the level seen today was at the end of the Second World War, and this shaped a generation of economic policymaking. International institutions were transformed, country policies were often draconian and distortive, and many crises ensued. By the early 1970s, when debt fell back to pre-war levels, the world was radically different. It is likely that changes of a similar magnitude -for better and for worse - will play out over coming decades. Sovereign Debt: A Guide for Economists and Practitioners is an attempt to build some structure around the issues of sovereign debt to help guide economists, practitioners and policymakers through this complicated, but not intractable, subject. Sovereign Debt brings together some of the world's leading researchers and specialists in sovereign debt to cover a range of sub-disciplines within this vast topic. It explores debt management with debt sustainability; debt reduction policies with crisis prevention policies; and the history with the conjuncture. It is a foundation text for all those interested in sovereign debt, with a particular focus real world examples and issues.
Author : M. Ayhan Kose,Peter Nagle,Franziska Ohnsorge,Naotaka Sugawara
Publisher : World Bank Publications
Page : 403 pages
File Size : 43,7 Mb
Release : 2021-03-03
Category : Business & Economics
ISBN : 9781464815454
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Author : Jaejoon Woo,Mr.Manmohan S. Kumar
Publisher : International Monetary Fund
Page : 48 pages
File Size : 52,5 Mb
Release : 2010-07-01
Category : Business & Economics
ISBN : 9781455201853
This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity. In addition, threshold effects, nonlinearities, and differences between advanced and emerging market economies are examined. The empirical results suggest an inverse relationship between initial debt and subsequent growth, controlling for other determinants of growth: on average, a 10 percentage point increase in the initial debt-to-GDP ratio is associated with a slowdown in annual real per capita GDP growth of around 0.2 percentage points per year, with the impact being somewhat smaller in advanced economies. There is some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. Analysis of the components of growth suggests that the adverse effect largely reflects a slowdown in labor productivity growth mainly due to reduced investment and slower growth of capital stock.
Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 88 pages
File Size : 44,8 Mb
Release : 2014-12-22
Category : Business & Economics
ISBN : 9781498342438
This paper explores how banking sector developments and characteristics influence the propagation of risks from the banking sector to sovereign debt, including how they affect the extent of fiscal costs of banking crises when those occur. It then proposes practices and policies for the fiscal authorities to help manage the risks and enhance crisis preparedness.
Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 33 pages
File Size : 41,8 Mb
Release : 1998-03-01
Category : Business & Economics
ISBN : 9781451844238
Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.
Author : Antonio Fatás,Mr.Atish R. Ghosh,Ugo Panizza,Mr.Andrea F Presbitero
Publisher : International Monetary Fund
Page : 53 pages
File Size : 49,6 Mb
Release : 2019-05-10
Category : Business & Economics
ISBN : 9781498312103
Governments issue debt for good and bad reasons. While the good reasons—intertemporal tax-smoothing, fiscal stimulus, and asset management—can explain some of the increases in public debt in recent years, they cannot account for all of the observed changes. Bad reasons for borrowing are driven by political failures associated with intergenerational transfers, strategic manipulation, and common pool problems. These political failures are a major cause of overborrowing though budgetary institutions and fiscal rules can play a role in mitigating governments’ tendencies to overborrow. While it is difficult to establish a clear causal link from high public debt to low output growth, it is likely that some countries pay a price—in terms of lower growth and greater output volatility—for excessive debt accumulation.
Author : Mr.Daniel Leigh,Mr.Andrea Pescatori,Mr.Jaime Guajardo
Publisher : International Monetary Fund
Page : 41 pages
File Size : 42,6 Mb
Release : 2011-07-01
Category : Business & Economics
ISBN : 9781455294695
This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest fiscal consolidation has contractionary effects on private domestic demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.
Author : Mr.Giovanni Dell'Ariccia,Caio Ferreira,Nigel Jenkinson,Mr.Luc Laeven,Alberto Martin,Ms.Camelia Minoiu,Alex Popov
Publisher : International Monetary Fund
Page : 54 pages
File Size : 48,9 Mb
Release : 2018-09-07
Category : Business & Economics
ISBN : 9781484359624
This paper reviews empirical and theoretical work on the links between banks and their governments (the bank-sovereign nexus). How significant is this nexus? What do we know about it? To what extent is it a source of concern? What is the role of policy intervention? The paper concludes with a review of recent policy proposals.
