Arbeitspapier
Fiscal fragility: What the past says about the future
The end of the great moderation has profound implications on the assessment of fiscal sustainability. The pertinent issue goes beyond the obvious increase in the stock of public debt/GDP induced by the global recession, to include the neglected perspective that the vulnerabilities associated with a given public debt/GDP increase with the future volatility of key economic variables. We evaluate for a given future projected public debt/GDP, the possible distribution of the fiscal burden or the flow cost of funding debt for each OECD country, assuming that this in future decades resembles that in the past decades. Fiscal projections may be alarmist if one jumps from the priors of great moderation to the prior of permanent high future burden. Prudent adjustment for countries exposed to heightened vulnerability may entail both short term stabilization and forward looking fiscal reforms.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 670
- Classification
-
Wirtschaft
Fiscal Policy
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
General Outlook and Conditions
- Subject
-
flow burden of public debt
fiscal vulnerability
Finanzpolitik
Öffentliche Schulden
Zins
Wirtschaftswachstum
Volatilität
Finanzreform
OECD-Staaten
- Event
-
Geistige Schöpfung
- (who)
-
Aizenman, Joshua
Pasricha, Gurnain Kaur
- Event
-
Veröffentlichung
- (who)
-
University of California, Economics Department
- (where)
-
Santa Cruz, CA
- (when)
-
2010
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Aizenman, Joshua
- Pasricha, Gurnain Kaur
- University of California, Economics Department
Time of origin
- 2010
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