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World Public Debt And Real Interest Rates
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Book Synopsis World Public Debt and Real Interest Rates by : Mr.Robert Ford
Download or read book World Public Debt and Real Interest Rates written by Mr.Robert Ford and published by International Monetary Fund. This book was released on 1995-03-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Real interest rates appear to have risen in virtually all industrialized countries relative to levels that prevailed in the 1960s and 1970s. There is increasing concern that this may reflect higher public debt, which is crowding out private sector activity. Over the last two decades, there has also been increasing international capital market integration. This suggests that interest rates in any country may be sensitive to global fiscal developments. This paper estimates the effects of aggregate fiscal developments in the industrialized world on real interest rates in nine industrial countries. The results imply that the increase in OECD-wide government debt since the late 1970s was a major factor explaining the rise in real interest rates.
Book Synopsis Global Waves of Debt by : M. Ayhan Kose
Download or read book Global Waves of Debt written by M. Ayhan Kose and published by World Bank Publications. This book was released on 2021-03-03 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Book Synopsis The Liquidation of Government Debt by : Ms.Carmen Reinhart
Download or read book The Liquidation of Government Debt written by Ms.Carmen Reinhart and published by International Monetary Fund. This book was released on 2015-01-21 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: High public debt often produces the drama of default and restructuring. But debt is also reduced through financial repression, a tax on bondholders and savers via negative or belowmarket real interest rates. After WWII, capital controls and regulatory restrictions created a captive audience for government debt, limiting tax-base erosion. Financial repression is most successful in liquidating debt when accompanied by inflation. For the advanced economies, real interest rates were negative 1⁄2 of the time during 1945–1980. Average annual interest expense savings for a 12—country sample range from about 1 to 5 percent of GDP for the full 1945–1980 period. We suggest that, once again, financial repression may be part of the toolkit deployed to cope with the most recent surge in public debt in advanced economies.
Book Synopsis Public Debt in Advanced Economies and its Spillover Effectson Long-Term Yields by : Mr.Emre Alper
Download or read book Public Debt in Advanced Economies and its Spillover Effectson Long-Term Yields written by Mr.Emre Alper and published by International Monetary Fund. This book was released on 2011-08-01 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Several models establish a positive association between public debt ratios and long-term real yields, but the empirical evidence is not always conclusive. We reconsider this issue, focusing in particular on possible spillover effects of large advanced economies' debt levels to other economies' borrowing yields, especially in emerging markets. We extend the existing literature by using real time expectations of fiscal and other macroeconomic variables for a large sample of advanced and emerging economies. We show that an increase in the public debt levels of large advanced economies - especially the United States - spills over to both emerging markets and other advanced economies' long-term real yields and that this effect is significant at the current levels of advanced economies' debt ratios.
Book Synopsis Debt Is Not Free by : Ms.Marialuz Moreno Badia
Download or read book Debt Is Not Free written by Ms.Marialuz Moreno Badia and published by International Monetary Fund. This book was released on 2020-01-03 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: With public debt soaring across the world, a growing concern is whether current debt levels are a harbinger of fiscal crises, thereby restricting the policy space in a downturn. The empirical evidence to date is however inconclusive, and the true cost of debt may be overstated if interest rates remain low. To shed light into this debate, this paper re-examines the importance of public debt as a leading indicator of fiscal crises using machine learning techniques to account for complex interactions previously ignored in the literature. We find that public debt is the most important predictor of crises, showing strong non-linearities. Moreover, beyond certain debt levels, the likelihood of crises increases sharply regardless of the interest-growth differential. Our analysis also reveals that the interactions of public debt with inflation and external imbalances can be as important as debt levels. These results, while not necessarily implying causality, show governments should be wary of high public debt even when borrowing costs seem low.
Book Synopsis Fiscal Deficits, Public Debt, and Sovereign Bond Yields by : Mr.Manmohan S. Kumar
Download or read book Fiscal Deficits, Public Debt, and Sovereign Bond Yields written by Mr.Manmohan S. Kumar and published by International Monetary Fund. This book was released on 2010-08-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent sharp increase in fiscal deficits and government debt in many countries raises questions regarding their impact on long-term sovereign bond yields. While economic theory suggests that this impact is likely to be adverse, empirical results have been less clear cut, have generally ignored nonlinear effects of deficits and debt through some other key determinants of yields, and have been mostly confined to advanced economies. This paper reexamines the impact of fiscal deficits and public debt on long-term interest rates during 1980 - 2008, taking into account a wide range of country-specific factors, for a panel of 31 advanced and emerging market economies. It finds that higher deficits and public debt lead to a significant increase in long-term interest rates, with the precise magnitude dependent on initial fiscal, institutional and other structural conditions, as well as spillovers from global financial markets. Taking into account these factors suggests that large fiscal deficits and public debts are likely to put substantial upward pressures on sovereign bond yields in many advanced economies over the medium term.
Book Synopsis Inflation and Public Debt Reversals in the G7 Countries by : Mr.Bernardin Akitoby
Download or read book Inflation and Public Debt Reversals in the G7 Countries written by Mr.Bernardin Akitoby and published by International Monetary Fund. This book was released on 2014-06-10 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the impact of low or high inflation on the public debt-to-GDP ratio in the G-7 countries. Our simulations suggest that if inflation were to fall to zero for five years, the average net debt-to-GDP ratio would increase by about 5 percentage points over the next five years. In contrast, raising inflation to 6 percent for the next five years would reduce the average net debt-to-GDP ratio by about 11 percentage points under the full Fisher effect and about 14 percentage points under the partial Fisher effect. Thus higher inflation could help reduce the public debt-to-GDP ratio somewhat in advanced economies. However, it could hardly solve the debt problem on its own and would raise significant challenges and risks. First of all, it may be difficult to create higher inflation, as evidenced by Japan’s experience in the last few decades. In addition, un-anchoring of inflation expectations could increase long-term real interest rates, distort resource allocation, reduce economic growth, and hurt the lower–income households.
Book Synopsis Public Debt, North and South by : Helmut Reisen
Download or read book Public Debt, North and South written by Helmut Reisen and published by World Bank Publications. This book was released on 1989 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why has government debt risen since 1984 despite rationed foreign lending and efforts at fiscal consolidation? And how can the rising debt be stopped? Possible remedies are growth -oriented fiscal adjustment, improved debt management, and voluntary debt reduction.
Book Synopsis Does Fiscal Policy Affect Interest Rates? Evidence from a Factor-Augmented Panel by : Mr.Salvatore Dell'Erba
Download or read book Does Fiscal Policy Affect Interest Rates? Evidence from a Factor-Augmented Panel written by Mr.Salvatore Dell'Erba and published by International Monetary Fund. This book was released on 2013-07-03 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reconsiders the effects of fiscal policy on long-term interest rates employing a Factor Augmented Panel (FAP) to control for the presence of common unobservable factors. We construct a real-time dataset of macroeconomic and fiscal variables for a panel of OECD countries for the period 1989-2012. We find that two global factors—the global monetary and fiscal policy stances—explain more than 60 percent of the variance in the long-term interest rates. Compared to the estimates from models which do not account for global factors, we find that the importance of domestic variables in explaining long-term interest rates is weakened. Moreover, the propagation of global fiscal shocks is larger in economies characterized by macroeconomic and institutional weaknesses.
Book Synopsis The Demand for Base Money and the Sustainability of Public Debt by : Valeriano F. García
Download or read book The Demand for Base Money and the Sustainability of Public Debt written by Valeriano F. García and published by World Bank Publications. This book was released on 1997 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Interest Rates and Government Debt by : Vito Tanzi
Download or read book Interest Rates and Government Debt written by Vito Tanzi and published by . This book was released on 1991 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Public Debt in Developing Countries by : Indermit Singh Gill
Download or read book Public Debt in Developing Countries written by Indermit Singh Gill and published by World Bank Publications. This book was released on 2005 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Over the past 25 years, significant levels of public debt and external finance are more likely to have enhanced macroeconomic vulnerability than economic growth in developing countries. This applies not just to countries with a history of high inflation and past default, but also to those in East Asia, with a long tradition of prudent macroeconomic policies and rapid growth. The authors examine why with the help of a conceptual framework drawn from the growth, capital flows, and crisis literature for developing countries with access to the international capital markets (market access countries or MACs). They find that, while the chances of another generalized debt crisis have receded since the turbulence of the late 1990s, sovereign debt is indeed constraining growth in MACs, especially those with debt sustainability problems ... " -- Cover verso.
Book Synopsis A World of Public Debts by : Nicolas Barreyre
Download or read book A World of Public Debts written by Nicolas Barreyre and published by Springer Nature. This book was released on 2020-10-26 with total page 593 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book analyzes public debt from a political, historical, and global perspective. It demonstrates that public debt has been a defining feature in the construction of modern states, a main driver in the history of capitalism, and a potent geopolitical force. From revolutionary crisis to empire and the rise and fall of a post-war world order, the problem of debt has never been the sole purview of closed economic circles. This book offers a key to understanding the centrality of public debt today by revealing that political problems of public debt have and will continue to need a political response. Today’s tendency to consider public debt as a source of fragility or economic inefficiency misses the fact that, since the eighteenth century, public debts and capital markets have on many occasions been used by states to enforce their sovereignty and build their institutions, especially in times of war. It is nonetheless striking to observe that certain solutions that were used in the past to smooth out public debt crises (inflation, default, cancellation, or capital controls) were left out of the political framing of the recent crisis, therefore revealing how the balance of power between bondholders, taxpayers, pensioners, and wage-earners has evolved over the past 40 years. Today, as the Covid-19 pandemic opens up a dramatic new crisis, reconnecting the history of capitalism and that of democracy seems one of the most urgent intellectual and political tasks of our time. This global political history of public debt is a contribution to this debate and will be of interest to financial, economic, and political historians and researchers. Chapters 13 and 19 are available open access under a Creative Commons Attribution 4.0 International License via link.springer.com.
Book Synopsis Interest Rates and Government Debt by : Mr.Mark Scott Lutz
Download or read book Interest Rates and Government Debt written by Mr.Mark Scott Lutz and published by INTERNATIONAL MONETARY FUND. This book was released on 1991-01-01 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Given the increasing integration of financial markets, a better understanding of the effects of fiscal deficits and debt on real interest rates might be obtained by taking a global, rather than a national, perspective. The paper constructs aggregate flow and stock data (including GDP, fiscal deficits, government debt, and saving rates) and examines the empirical evidence of the global effect of fiscal policies on interest rates. The sensitivity of the results to the choice of deficit (central or general government), public debt (gross or net), and saving (gross or net), as well as the level and method of aggregation, is also examined.
Book Synopsis Debt Sustainability by : Ludger Schuknecht
Download or read book Debt Sustainability written by Ludger Schuknecht and published by Cambridge University Press. This book was released on 2022-09-15 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study presents the facts, arguments and scenarios around public debt from a global perspective. Especially the largest economies feature record debt and fiscal risks, including from population ageing and financial imbalances. Given low interest rates, there is no imminent problem. But at some point, debt will have to come down. There are four possible scenarios how debt could come down. First, governments could economise and reform. Second, governments could default. Third, governments could erode the real value of debt via inflation and negative real interest rates. However, this scenario cannot continue forever. Policy errors can prompt a loss of confidence, destabilisation and crisis. This fourth scenario last included the largest economies in the 1970s. It would become a major global challenge if it were to happen again in today's interconnected world.
Book Synopsis Government Deficits, the Real Interest Rate and LDC Debt by : Deepak Lal
Download or read book Government Deficits, the Real Interest Rate and LDC Debt written by Deepak Lal and published by . This book was released on 1984 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Public Debt and Growth by : Jaejoon Woo
Download or read book Public Debt and Growth written by Jaejoon Woo and published by International Monetary Fund. This book was released on 2010-07-01 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
