Debt Dynamics

2003 ◽  
Author(s):  
Chris Hennessy ◽  
Toni M. Whited
Keyword(s):  
Debt Dynamics

scholarly journals r minus g negative

2020 ◽  
Vol 20 (52) ◽  
Author(s):  
Paolo Mauro ◽  
Jing Zhou
Keyword(s):  
Interest Rates ◽  
Emerging Economies ◽  
Global Financial Crisis ◽  
Borrowing Costs ◽  
Debt Dynamics ◽  
High Government ◽  
Traditional Assumption ◽  
Historical Database ◽  
Sovereign Defaults ◽  
The Global Financial Crisis

Contrary to the traditional assumption of interest rates on government debt exceeding economic growth, negative interest-growth differentials have become prevalent since the global financial crisis. As these differentials are a key determinant of public debt dynamics, can we sleep more soundly, despite high government debts? Our paper undertakes an empirical analysis of interestgrowth differentials, using the largest historical database on average effective government borrowing costs for 55 countries over up to 200 years. We document that negative differentials have occurred more often than not, in both advanced and emerging economies, and have often persisted for long historical stretches. Moreover, differentials are no higher prior to sovereign defaults than in normal times. Marginal (rather than average) government borrowing costs often rise abruptly and sharply, but just prior to default. Based on these results, our answer is: not really.

scholarly journals The Public Debt of Ukraine and the Budget Expenditure for Its Service

2018 ◽  
Vol 80 (1) ◽  
pp. 30-39 ◽  
Author(s):  
T. H. Bondaruk ◽  
O. S. Bondaruk ◽  
N. Yu. Melnychuk
Keyword(s):  
Public Debt ◽  
Debt Management ◽  
Public Budget ◽  
Sharp Drop ◽  
The Public ◽  
Debt Burden ◽  
Debt Dynamics ◽  
External Sources ◽  
Public Debt Management ◽  
Made In

the public debt is deepened, the visions of the public debt as a phenomenon burdening the national economy, found in various schools of economics, are reviewed. It is demonstrated that the high internal and external dept in parallel with the respectively growing expenditure for its service is a pressing problem for Ukraine, calling for an urgent solution. This raises the need for seeking ways to improve the public debt management mechanisms. The article’s objective is to deepen the theoretical and methodological framework for assessment of the public debt in Ukraine and the budget expenditures for its service. It is demonstrated that the public debt in Ukraine results from the public budget deficit, high sovereign borrowing from internal and external sources. The econometric assessment of the time series on budget expenditures for debt service and repayment in Ukraine is given. The analysis of the public debt dynamics in Ukraine shows that not only the increasing volume of public debt and State-guarantee debt, but also the increasing budget expenditures on its service and repayment are dangerous. The high deficit of public budget is persisting, which growth is caused, inter alia, by the payment commitments. The expenditures on service and repayment of public debt constitute a large share in the public budget expenditures. Forecasting calculations made in the article demonstrate the upward tendency in the public budget expenditures on repayment and service of the public debt of Ukraine, thus signaling the growing threats to the budget security of Ukraine. The main factors for the rapidly increased debt burden in Ukraine over the latest years are identified: the considerable devaluation of domestic currency (Hryvnya), sharp drop in GDP, the shrinking internal consumer demand, etc.    It is demonstrated that the risk of the increasing payments for service of public debt is an essential and chronic factor generating problems in public finances and affecting the budget security of Ukraine.  

scholarly journals Optimal Debt Dynamics, Issuance Costs, and Commitment

2020 ◽  
Author(s):  
Luca Benzoni ◽  
Lorenzo Garlappi ◽  
Robert S. Goldstein ◽  
Julien Hugonnier ◽  
Chao Ying
Keyword(s):  
Debt Dynamics

scholarly journals Consumer Debt Dynamics: Follow the Increasers

2014 ◽  
Author(s):  
John Carter Braxton ◽  
Edward S. Knotek
Keyword(s):  
Consumer Debt ◽  
Debt Dynamics

scholarly journals Escaping the debt constraint on growth: a suggested monetary policy for Brazil

2004 ◽  
Vol 24 (1) ◽  
pp. 38-52
Author(s):  
THOMAS I. PALLEY
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rates ◽  
Debt Service ◽  
Debt Sustainability ◽  
Investor Confidence ◽  
Credit Creation ◽  
Debt Dynamics ◽  
Domestic Credit ◽  
Exchange Rate Depreciation

ABSTRACT Existing interest rates imply explosive debt dynamics for Brazil. It also faces rising inflation from earlier currency depreciations, which could trigger future depreciation. These conditions impose a policy contradiction. Brazil needs lower interest rates for debt sustainability, but tight monetary policy to avoid exchange rate depreciation and inflation. The paper develops a strategy to escape this contradiction. Policy must bolster investor confidence to lower external interest rates, lower domestic interest rates to reduce debt service burdens, and implement domestic credit creation controls to control inflation.

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