Download or read book Sustainability of Public Debt in the United States and Japan written by William R. Cline and published by . This book was released on 2016 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper applies the probabilistic debt sustainability model developed for the euro area in Cline (2012, 2014) to sovereign debt in the United States and Japan. The results indicate that to avoid further increases in the expected ratio of public debt to GDP over the next decade, average annual primary deficits will need to be reduced by about 0.75 percent of GDP in the United States and by about 3 percent of GDP in Japan from the likely baselines as of mid-2014.

Download or read book Public Debt Sustainability written by Barry W. Poulson and published by Rowman & Littlefield. This book was released on 2022-01-04 with total page 389 pages. Available in PDF, EPUB and Kindle. Book excerpt: As countries recover from the coronavirus pandemic, they are confronted with an even more challenging debt crisis. Xavier Debrun argues in the foreword that in deciding where we go from here that there is no longer a consensus regarding the optimum design and enforcement of fiscal rules. Rather we must address a series of questions and challenges to the conventional wisdom. This book provides an opportunity for scholars to explore these questions from an international perspective, with reference to European countries, and emerging nations as well as the United States.

Download or read book Sustainability of Public Debt written by Masato Shizume and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Japan defaulted on its public debt after the Second World War. This article addresses the question of how Japan lost its ability to sustain its public debt. We explore the sustainability of public debt in Japan before the War. We conduct statistical tests for the relationship between public debt and primary fiscal balance, and find that Japanese public debt was sustainable until 1931, and unsustainable in and after 1932. Narrative modes of analysis indicate that Japan lost its fiscal discipline because of the military's effective veto over budgetary processes and because of the absence of pressure for sound fiscal policy from international financial markets.

Download or read book Public Debt Sustainability in Developing Asia written by Benno Ferrarini and published by Routledge. This book was released on 2012 with total page 227 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book The Sustainability of Asia s Debt written by Ferrarini, Benno and published by Edward Elgar Publishing. This book was released on 2022-02-22 with total page 456 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is an open access title available under the terms of a [CC BY 3.0 IGO] License. It is free to read, download and share on Elgaronline.com. Asia has shown the world what success in economic development looks like. From the amazing transformations of Japan, the Republic of Korea, and the other ‘tigers’ in the early 70s, to the more recent takeoffs of the People’s Republic of China (PRC), India, and the leading economies in Southeast Asia, the region has prospered at a startling pace. Technologies were adopted, productivity raised, and export markets conquered. Billions were lifted out of poverty. What was once a backwater is now a global engine of growth.

Download or read book Sustainability Debt Management and Public Debt Policy in Japan written by Takerō Doi and published by . This book was released on 2006 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: We include a potential possibilities of the government bonds in our theoretical model. The public bonds, therefore, cannot be sold when the issuance leads the amount of debt outstanding to be more than a certain level. In this respect, the fiscal authority has to take into account the upper limit of stocks of public debt.

Download or read book Happy News from the Dismal Science written by Christian Miguel Broda and published by . This book was released on 2004 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: "We analyze fiscal policy and fiscal sustainability in Japan using a variant of the methodology developed in Blanchard (1990). We find that Japan can achieve fiscal sustainability over a 100-year horizon with relatively small changes in the tax-to-GDP ratio. Our analysis differs from more pessimistic analyses in several dimensions. First, since Japanese net debt is only half that of gross debt, we demonstrate that the current debt burden is much lower than is typically reported. This means that monetization of the debt will have little impact on Japan's fiscal sustainability because Japan's problem is the level of future liabilities not current ones. Second, we argue that one obtains very different projections of social security burdens based on the standard assumption that Japan's population is on a trend towards extinction rather than transitioning to a new lower level. Third, we demonstrate that some modest cost containment of the growth rate of real per capita benefits, such as cutting expenditures for shrinking demographic categories, can dramatically lower the necessary tax burden. In sum, no scenario involves Japanese taxes rising above those in Europe today and many result in tax-to-GDP ratios comparable to those in the United States"--National Bureau of Economic Research web site.

Download or read book Fiscal Sustainability in Japan written by Shiro Patrick Armstrong and published by . This book was released on 2016 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: Japanese government debt is at unprecedented levels with a gross debt to gross domestic product ratio of over 230)per cent and a net debt to gross domestic product ratio of 150)per cent. There are three big challenges to fiscal sustainability: the huge amount of government bonds outstanding; continued budget deficits; and the growing age-related spending. The debt is sustainable as long as the market as a whole believes it is. The path to fiscal consolidation requires increasing the tax rate, reducing spending, broadening the tax base and growing the economy out of trouble. The longer the delay before moving to a more sustainable consolidation path, the larger the risks and closer Japan moves towards a financial crisis. The policy goal is to keep government debt sustainable, not to repay it all. Just as Japan has done since the burst of the asset bubble in the early 1990s, there is every likelihood that the Japanese economy will muddle through.

Download or read book Japanese Government Debt and Sustainability of Fiscal Policy written by Takero Doi and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We construct quarterly series of the revenues, expenditures, and debt outstanding for Japan from 1980 to 2010, and analyze the sustainability of the fiscal policy. We pursue three approaches to examine the sustainability. First, we calculate the minimum tax rate that stabilizes the debt to GDP ratio given the future government expenditures. Using 2010 as the base year, we find that the government revenue to GDP ratio must rise permanently to 40%-47% (from the current 33%) to stabilize the debt to GDP ratio. Second, we estimate the response of the primary surplus when the debt to GDP ratio increases. We allow the relationship to fluctuate between two "regimes" using a Markov switching model. In both regimes, the primary surplus to GDP ratio fails to respond positively to debt, which suggests the process is explosive. Finally, we estimate a fiscal policy function and a monetary policy function with Markov switching. We find that the fiscal policy is "active" (the tax revenues do not rise when the debt increases) and the monetary policy is "passive" (the interest rate does not react to the inflation rate sufficiently) in both regimes. These results suggest that the current fiscal situation for the Japanese government is not sustainable.

Download or read book Public Debt Sustainability written by Xavier Debrun and published by . This book was released on 2019 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why can Japan sustain debts above 200 percent of GDP, while Ukraine defaulted on its debt when it was 30 percent of GDP? Answering that question is challenging. First, debt sustainability does not easily translate into operational concepts and indicators. Second, servicing the debt is a strategic decision, the result of a cost-benefit analysis. Thus markets can always, for good or bad reasons, question governments' commitment to face their financial obligations. Third, uncertainty around public debt developments is large and difficult to model. Fourth, not all debts are born equal, as the currency composition, maturity structure, type of creditor and ownership of the debt affect exposure to rollover and liquidity risks. The paper surveys the knowns and unknowns of debt sustainability, including the tools helping us to understand vulnerabilities and to inform our judgment. Instead of embarking on the impossible mission to build a holistic, consistent and broadly-accepted debt-sustainability framework for practitioners, we take the more modest approach to review some of the key economic principles and statistical methods that form today's leading practice in debt sustainability assessments.

Download or read book The Sustainability of Japan s Public Debt written by Robin Semerjibashian and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Japan's debt ratio is reaching unprecedented levels, even when accounting for World War debt. In addition, economic growth has been slow for two decades and the population is projected to age rapidly. These are just two from the myriad of problems the country faces. Therefore, this thesis tests for the sustainability of Japanese public debt and presents recommendations to reduce it. It consists of three parts. First, I present a model developed by Gärtner (2007) that identifies the differential between interest rate and economic growth rate as a crucial determinant of long-term debt sustainability. In the second part, I apply Gärtner's model in conjunction with Bohn's (1998) test for debt sustainability, which tests for a positive, systematic relationship between primary surplus and debt ratio. Both tests concluded that Japanese public debt is still unsustainable, even with a data set until 2013. In the third part, I discuss economic growth enhancing measures in addition to a debt haircut scenario as a measure to reduce public debt. Departing from the Solow model, I first propose various solutions for how Japanese growth may be revived. In that context, increasing imports as well as capital stock growth and competitiveness can foster Total Factor Productivity (TFP) contributions to real GDP growth. An informative media campaign concerning the negative societal consequences of a low Total Fertility Rate (TFR) as well as a new migration policy similar to the Canadian Class Experience (CCE) bear the potential to foster population and in particular labor force growth. In the final part, I discuss a scenario in which Japan can restructure its sovereign debt such that it is no longer economic growth inhibiting. I propose cutting nominal gross debt by 60%, making the new debt ratio 90%. Furthermore, I recommend that all creditors and bond maturities shall be, as far as possible, affected equally by the restructuring efforts. The only.

Download or read book Sustainability of Public Debt written by Masato Shizume and published by . This book was released on 2007 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Sustainability Debt Management and Public Debt Policy in Japan written by Takero Doi and published by . This book was released on 2014 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this paper is to analyze sustainability issues of Japan%u2019s fiscal policy and then to discuss the debt management policy using the theoretical models and numerical studies. We also investigate the desirable coordination of fiscal and monetary authorities toward fiscal reconstruction.We include a potential possibilities of the government bonds in our theoretical model. The public bonds, therefore, cannot be sold when the issuance leads the amount of debt outstanding to be more than a certain level. In this respect, the fiscal authority has to take into account the upper limit of stocks of public debt.This possibility of debt default provides the fiscal authority to issue public bonds strategically in an earlier period. A strategic behavior of fiscal authority induces the monetary authority, in a later period, to boost output and raise seigniorage revenues to eliminate the distortion of resource allocation due to the limitation on debt issuance. Therefore, the monetary policy in a later period suffers from an inflation bias from the ax ante point of view.There are two ways to eliminate this distortion toward successful fiscal restoration. One of them is to make the monetary authority more conservative than society in the sense that the price stability weight of monetary authority is higher than that of society. The other way of eliminating the distortion of the resource allocation is to design an institutional ceiling on the debt issuance. The direct ceiling can provide a binding constraint of the public bond issuance for the fiscal authority of Japan because it has accumulated the debt outstanding much more than other countries.

Download or read book Sustainability of Public Debt written by Reinhard Neck and published by CESifo Seminar. This book was released on 2008 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt: Theoretical and empirical perspectives on how fiscal policies in Europe and the United States can avoid government bankruptcy.

Download or read book In Defense of Public Debt written by Barry Eichengreen and published by Oxford University Press. This book was released on 2021-08-11 with total page 321 pages. Available in PDF, EPUB and Kindle. Book excerpt: A dive into the origins, management, and uses and misuses of sovereign debt through the ages. Public debts have exploded to levels unprecedented in modern history as governments responded to the Covid-19 pandemic and ensuing economic crisis. Their dramatic rise has prompted apocalyptic warnings about the dangers of heavy debtsabout the drag they will place on economic growth and the burden they represent for future generations. In Defense of Public Debt offers a sharp rejoinder to this view, marshaling the entire history of state-issued public debt to demonstrate its usefulness. Authors Barry Eichengreen, Asmaa El-Ganainy, Rui Esteves, and Kris James Mitchener argue that the ability of governments to issue debt has played a critical role in addressing emergenciesfrom wars and pandemics to economic and financial crises, as well as in funding essential public goods and services such as transportation, education, and healthcare. In these ways, the capacity to issue debt has been integral to state building and state survival. Transactions in public debt securities have also contributed to the development of private financial markets and, through this channel, to modern economic growth. None of this is to deny that debt problems, debt crises, and debt defaults occur. But these dramatic events, which attract much attention, are not the entire story. In Defense of Public Debt redresses the balance. The authors develop their arguments historically, recounting two millennia of public debt experience. They deploy a comprehensive database to identify the factors behind rising public debts and the circumstances under which high debts are successfully stabilized and brought down. Finally, they bring the story up to date, describing the role of public debt in managing the Covid-19 pandemic and recession, suggesting a way forward once governmentsnow more heavily indebted than beforefinally emerge from the crisis.

Download or read book Sovereign Debt in Advanced Economies written by Rebecca M. Nelson and published by Createspace Independent Pub. This book was released on 2013-03-13 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sovereign debt, also called public debt or government debt, refers to debt incurred by governments. Since the global financial crisis of 2008-2009, public debt in advanced economies has increased substantially. A number of factors related to the financial crisis have fueled the increase, including fiscal stimulus packages, the nationalization of private-sector debt, and lower tax revenue. Even if economic growth reverses some of these trends, such as by boosting tax receipts and reducing spending on government programs, aging populations in advanced economies are expected to strain government debt levels in coming years. High levels of debt in advanced economies are a relatively new global concern, after decades of attention on debt levels in developing and emerging markets. Three Eurozone countries, Greece, Ireland, and Portugal, have turned to the International Monetary Fund (IMF) and other European governments for financial assistance in order to avoid defaulting on their loans. There are also concerns about the sustainability of public debt in Japan and the United States. To date, many advanced-economy governments have embarked on fiscal austerity programs (such as cutting spending and/or increasing taxes) to address historically high levels of debt. This policy response has been criticized by some economists as possibly undermining a weak recovery from the global financial crisis. Others argue that the austerity plans do not go far enough, and that more reforms are necessary to bring debt levels down, especially considering the aging populations in many countries. Issues for Congress: Is the United States headed for a Eurozone-style debt crisis? Some economists and Members of Congress fear that, given historically high levels of U.S. public debt, the United States is headed towards a debt crisis similar to those experienced by some Eurozone countries. Others argue that important differences between the United States and Eurozone economies, such as growth rates, borrowing rates, and type of exchange rate (floating or fixed), put the United States in a stronger position. The United States has a long historical record of debt repayment, and bond spreads indicate that investors currently view the United States as far less risky than Greece, Ireland, or Portugal; Impact on U.S. economy. The focus of most advanced economies on austerity programs to lower debt levels could slow growth in advanced economies and depress demand for U.S. exports. Financial instability stemming from high debt levels could also impact U.S. markets and financial institutions; Policy options for Congress. Congress is debating proposals to reduce federal debt levels in the United States. Congress could urge the Administration to coordinate fiscal policies multilaterally to avoid simultaneous austerity measures that undermine the economic recovery.

Download or read book Assessing the Sustainability of Government Debt On the Different States of Debt GDP Process written by Anton Velinov and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: