Essays on Fiscal Policy, Public Debt and Financial Development PDF Download

Author: Alfredo Schclarek Curutchet
Publisher:
ISBN:
Category : Argentina
Languages : en
Pages : 105

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Author: Harry Johnson
Publisher: Routledge
ISBN: 1134623569
Category : Business & Economics
Languages : en
Pages : 341

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Reprinting the second edition (which included a new introduction explaining developments which had emerged since first publication) this book discusses explorations in the fundamental theory of a monetary economy, a theoretical critique of the ‘Phillips Curve’ approach to the theory of inflation and the theory of the term structure of interest rates in terms of the theory of forward markets pioneered by David Meiselman.

Author: Cansın Kemal Can
Publisher: Cambridge Scholars Publishing
ISBN: 1527570789
Category : Business & Economics
Languages : en
Pages : 156

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Book Description
Despite its beneficial aspects, public debt can be hazardous for macroeconomic performance should it reach unrepayable levels as a consequence of snowballing explosive trends. Failure to monitor the existing trend in public debt in order to detect such divergences from the stable path, and the lack of an adaptive public financial management can potentially culminate in a public debt crisis whose disruptive economic impacts can permeate all sectors of the economy very swiftly. However, public debt sustainability is a vague concept with no straightforward operational definitions. In addition, its multi-faceted nature is an impediment for the implementation of real-world appraisal of the fiscal posture from a stability viewpoint. As such, quantifying the public debt sustainability is essential for overhauling the fiscal policies so as to avoid a potential debt crisis stemming from malfunctioning fiscal policies. This book provides the reader with a practical and straightforward framework that outlines a tool for undertaking public debt sustainability analysis. In order to guide further empirical investigations, the discussion in this book is underpinned by a real-world application of the model which highlights the practical aspects of the tool with reference to time-varying empirical evidence from a developing country.

Author: Kenneth J. Arrow
Publisher: Springer
ISBN: 134919459X
Category : Business & Economics
Languages : en
Pages : 331

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Book Description
A collection of essays presenting new insights into the analysis of public debt theory, recent historical episodes, econometric analyses and policy dilemmas and options. It also documents the perceptions of debt problems from viewpoints of national economies as well as the world economy.

Author: Henry Carter Adams
Publisher:
ISBN:
Category : Debts, Public
Languages : en
Pages : 444

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Author: Fraser William Knox
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
This thesis consists of three essays which relate to the conduct of fiscal policy and the pricing of sovereign debt. The first chapter examines the credibility of official budgetary projections produced by the fiscal authorities of EU member states, as required under the provisions of the Stability and Growth Pact. Drawing upon existing studies, evidence is presented which demonstrates that these official projections are characterised by optimism bias, i.e. announced budgetary adjustments persistently falls short of those observed in practice. This chapter contributes to the existing literature by identifying a systematic link between the magnitude of this optimism bias and the degree of fragmentation which characterises the government: whereby greater fragmentation of this type coincides with a tendency to submit more optimistic projections. Numerical fiscal rules are then considered as a mechanism for improving the credibility of these projections and it shown that budgetary strictures of this form have been effective in reducing the optimism bias which emerges when government fragmentation increases. The second chapter investigates the relative importance of systematic risk and conventional fiscal indicators in characterising the default risks of EMU member states and as potential explanations of pricing disparities which exist between public debt securities issued by these countries. Using both a portfolio approach and Fama and Macbeth cross-sectional regressions it is demonstrated that measures of systematic default risk (approximated by an issuer's default beta) and fiscal indicators overlap in the manner of risks which they represent. It is also shown that the common variation which exists between these alternate measures is relevant in explaining difference in the excess returns on EMU public debt securities in sample periods which both include and exclude the recent sovereign debt crisis. The third and final chapter uses a panel data model to examine yield spreads on ten-year public debt securities issued by EMU sovereign nations from 2005 to 2012. Existing studies have highlighted that there are (at times) substantial discrepancies between the spreads implied this class of model and the value of spreads observed in practice, particularly since the advent of the sovereign debt crisis in late 2009. Evidence of this nature has been used to substantiate arguments that financial markets have incorrectly priced the relative risks associated with these securities given that their prices cannot be related to an assumed fundamental basis. In this chapter I present an alternative account of evolutions in EMU yield spreads during the crisis which focuses upon the scale of macroeconomic imbalances characterising certain member states and their implications for public debt sustainability. It is shown that once these factors are taken into account up to 83% of the observed variation in yield spreads can be explained over this period. These results re-establish the importance of fundamentals in understanding market based perceptions of sovereign default risk during the crisis.

Author: Alfred Greiner
Publisher: Springer
ISBN: 3319093487
Category : Business & Economics
Languages : en
Pages : 284

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Book Description
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: Alfred Greiner
Publisher: Springer Science & Business Media
ISBN: 3642017452
Category : Business & Economics
Languages : en
Pages : 148

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Book Description
Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether empirical evidence for that rule can be found. Additional tests are implemented to gain further evidence on sustainability of public debt. In order to allow for time varying coefficients penalized spline estimations are performed. The theoretical chapters present endogenous growth models and assume that the primary surplus rises as public debt increases so that sustainability of public debt is given. Implications of public deficits and debt are studied assuming full employment and for unemployment. The conclusion summarizes the findings and compares the results of the different models. Finally, policy implications are given showing how governments should deal with high public debt to GDP ratios.

Author: Mr.Carlos M. Asilis
Publisher: International Monetary Fund
ISBN: 1451841973
Category : Business & Economics
Languages : en
Pages : 36

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Book Description
The increase in the U.S. public debt over the past twelve years raises questions about its implications for investment and economic growth. This paper places these developments within an international and historical context and quantitatively examines the implications of various measures of the current U.S. public debt-to-GDP ratio on economic growth. The analysis is undertaken through extensions of recently developed endogenous growth models. The results suggest that while higher levels of the public debt may affect long-run economic growth negatively, the order of magnitude is not large enough to be a cause for serious concern.

Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498344658
Category : Business & Economics
Languages : en
Pages : 257

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Book Description
This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.