Public debt dynamics : the effects of austerity, inflation, and growth shocks /

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Bibliographic Details
Author / Creator:Cherif, Reda.
Imprint:Washington, D.C. : International Monetary Fund, 2012.
Description:1 online resource (28 pages) : charts
Language:English
Series:IMF working paper ; WP/12/230
IMF working paper ; WP/12/230.
Subject:
Format: E-Resource Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/11157646
Hidden Bibliographic Details
Other authors / contributors:Hasanov, Fuad, 1978-
International Monetary Fund. Institute for Capacity Development.
ISBN:1475541279
9781475541274
1475510551
9781475510553
1475565542
9781475565546
9781475510553
9781475565546
Digital file characteristics:data file
Notes:At head of title: Institute for Capacity Development.
"September 2012."
Includes bibliographical references (pages 14-16).
Summary:The author studies how macroeconomic shocks affect U.S. public debt dynamics using a VAR with debt feedback. Following a fiscal austerity shock, the debt ratio initially declines and then returns to its pre-shock path. Yet, the effect is not statistically significant. In a weak economic environment, the likelihood of a self-defeating austerity shock is much higher than in normal times. An inflation shock only slightly reduces the debt ratio for a few quarters. A positive growth shock unambiguously lowers debt. In our specification, the debt ratio is stationary, whereas a VAR excluding debt may imply an explosive debt path.
Standard no.:10.5089/9781475541274.001