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1
Alkan, Feyza. "The Sustainability Analysis Of Turkish Domestic Debt." Master's thesis, METU, 2009. http://etd.lib.metu.edu.tr/upload/2/12611159/index.pdf.
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In this thesis, sustainability of the Turkish domestic debt is analyzed within the &ldquosustainability indicators&rdquo
perspective. The fiscal targets of Maastricht Treaty (1992) are imposed on the Turkish fiscal policy and it is investigated whether these targets are the indicators for sustainability in the medium term. Uctum and Wickens&rsquo
(2000) methodology is followed in assessing the sustainability of the current fiscal policy and the efficiency of the Maastricht Treaty (1992) targets. Moreover, the vector auto regression (VAR) approach of Garcia and Rigobon (2004) is utilized in deriving the econometric model for the debt dynamics of Turkey. The results suggest that domestic debt of Turkey has been unsustainable within 1994-2008. Furthermore, the Maastricht Treaty (1992) fiscal targets are binding for Turkey and gaining more significance in the recent years.
2
BATTIATI, CLAUDIO. "Essays on fiscal policy and debt sustainability." Doctoral thesis, Università degli Studi di Roma "Tor Vergata", 2015. http://hdl.handle.net/2108/208027.
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The rst chapter develops an endogenous growth model with public debt and publicly nanced
infrastructure and human capital accumulation. The government sets the primary surplus as a
positive function of the debt-GDP ratio to ensure intertemporal solvency. Conditions for the
existence of a unique equilibrium and saddle-path stability are discussed: in a simplied version of
the model these are ensured by a strong enough reaction to a debt increase. Dynamics associated
with debt-reducing policies and budget-neutral scal reforms in a calibrated economy are described
through numerical simulations. Tax-based scal consolidations turn out growth-enhancing in the
long run, while spending cuts improve welfare. In general, a trade-o emerges between short and
long-run growth, but it is weaker when consolidation is implemented by reducing the debt-GDP
target. Reallocating funds from education to infrastructure and increasing the government size
may also boost economic growth, but only the former policy change is also welfare improving.
The second chapter studies the growth and welfare eects of alternative scal policy reforms
in a model calibrated to describe an over-indebted advanced economy. When a debt feedback rule
is used, scal consolidations can stimulate long-run growth, and, if based on spending cuts, even
improve welfare. Indeed, as the debt stock declines, tax cuts and increases in public spending
follow, thus encouraging the agent to spend more time on work and education. On the one side,
this restricts the eectiveness of debt-reducing policies, on the other it boosts growth and improves
the welfare results. Shifting the tax burden from labor to capital or consumption also has positive
eects on long-run growth, but increasing the capital tax rate should be avoided if the government
is concerned about containing the debt-GDP ratio or if the goal of the policy-maker is to improve
welfare.
What constitutes ample scal space or a \safe level of debt" to conduct countercyclical policy
while ensuring debt sustainability? The last chapter addresses the question by exploring the relationship
between debt dynamics, and the probabilistic distribution of the primary balance and
the eective interest rate. Using this approach, we nd that two-thirds of Low-Income Developing
Countries (LIDCs) presently have scal policy space to address adverse shocks, subject to the
availability of domestic and external nancing. Countries with strong institutional capacity tend to
have more scal space: seventy-ve percent of countries with high and medium institutional capacity
maintain debt levels below both their \debt sustainability ceiling" and their \safe debt" level
estimated in this paper. Countries with strong institutional capacity tend to
have more scal space: seventy-ve percent of countries with high and medium institutional capacity
maintain debt levels below both their \debt sustainability ceiling" and their \safe debt" level
estimated in this paper. Countries with weak institutional capacity, mostly countries in con
ict
and fragile states, tend to lack scal space.
3
Aldama, Pierre. "Essays on fiscal policy and public debt sustainability." Thesis, Paris 1, 2017. http://www.theses.fr/2017PA01E016/document.
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Cette thèse contribue à l'analyse de la soutenabilité de la dette publique et des règles budgétaires en macroéconomie. Elle tire sa motivation des multiples preuves empiriques de l'existence de régimes budgétaires insoutenables durant lesquels le solde primaire ne s’accroît pas suite à un accroissement de la dette publique. Ces régimes insoutenables menacent-ils nécessairement la soutenabilité de la dette publique à long-terme ? Si non, combien de temps la politique budgétaire peut-elle rester périodiquement insoutenable sans être globalement insoutenable ? Le premier chapitre apporte une réponse théorique à cette question et propose un test de type "Model-Based Sustainability" étendu aux changements de régimes (RS-MBS). Nous étudions une règle budgétaire à changement de régime Markovien, dont l'un des régimes est insoutenable, et définissons des conditions suffisantes pour exclure un Jeu de Ponzi et pour garantir la stabilité du ratio dette/PIB à long terme. Le second chapitre propose d'appliquer le test RS-MBS à la politique budgétaire française entre 1962 et 2013. Il montre que la prise en compte des changements de régime peut inverser les résultats empiriques précédents et conclure à la soutenabilité de la dette publique française sur l'ensemble de la période. Le troisième chapitre traite d'un autre cas de régime insoutenable, quand la politique budgétaire est contrainte par sa limite fiscale, et étudie l'effet de la maturité de la dette sur le seuil d'endettement public maximal. Nous montrons que l'allongement de la maturité de la dette n'accroît pas le seuil de défaut stochastique quand le défaut survient à cause de chocs négatifs sur la productivité. Enfin. le quatrième chapitre propose une appréciation critique de l'architecture budgétaire de l'UEM, à partir d'une revue de la littérature traitant de la soutenabilité budgétaire. de l'interaction des politiques monétaires et budgétaires et des règles budgétaires en union monétaireThis thesis contributes to the analysis of public debt sustainability and fiscal rules. It starts from the multiple empirical evidence that points to the existence of unsustainable fiscal regimes during which fiscal policy does not increase its primary surplus following an increase of public debt. Do unsustainable fiscal regimes necessarily threaten the long-run sustainability of public debt? If not, how long can fiscal policy be periodically unsustainable without being globally unsustainable? The first chapter answers theoretically this question and proposes a Regime-Switching ModelBased Sustainability (RS-MBS) test. We study a Markov-switching fiscal policy rule, which displays an unsustainable fiscal regime, and derive sufficient conditions for the No-Ponzi Game condition and for a globally stable public debt-to-GDP ratio. The second chapter proposes an empirical application of the RS-MBS to France's fiscal policy between 1962 and 2013. It shows that taking into account regime switches can overturn former results and conclude that France's public debt has been sustainable overall the period. The third chapter considers another case of unsustainable regime, when fiscal policy is constrained by the fiscal limit, and studies the effect of public debt maturity on the debt limit. We show that longer debt maturities do not increase the stochastic default threshold when sovereign default is triggered by bad productivity shocks. Finally, the fourth chapter proposes a critical appraisal of the fiscal architecture of the EMU, based on a literature survey about fiscal sustainability, monetary-fiscal interactions and fiscal rules in monetary unions
4
Ferrarini, Benno. "External debt and macroeconomic vulnerability : a proposal for state-contingent debt contracts to achieve low-income country debt sustainability." Thesis, SOAS, University of London, 2007. http://eprints.soas.ac.uk/28808/.
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We argue that the 'New Debt Sustainability Framework' (DSF), as recently introduced by the Bretton Woods Institutions, is tailored to suit the aid allocation mechanism centred on the Country Policy and Institutional Assessment (CPIA), but fails to take into account low-income countries' economic vulnerability and exposure to exogenous shocks. As a result, the DSF further undermines the effective delivery of aid by the International Development Association (IDA), and fails to support recipient countries in their efforts to achieve lasting debt sustainability. Furthermore, we demonstrate that the findings of the empirical studies underlying the DSF and IDA14 replenishment are not robust to the introduction of vulnerability measures, such as the Economic Vulnerability Indicator (EVI), which undermine the significance of the CPIA in predicting debt distress episodes. In order to overcome the shortcomings of the DSF, we propose the introduction of a Contingency Debt Sustainability Framework (CDSF), which distinguishes between the causes of vulnerability underlying the external debt problem affecting most of the low-income countries. Drawing on the most established strands of sovereign debt and contract theory literature, we argue that state-contingent debt contracts represent the most effective financial instrument to link aid allocation and debt relief to recipient countries' financial requirements, contingent on the state of nature. To implement state-contingent contracts in the specific context of low-income debtor countries, we devise an accounting method by which shock and trend factors in the balance of payments are distinguished by their exogenous or endogenous origin. On the basis of this distinction, the CDSF financially compensates debtor countries for exogenous shock and trend factors, without giving rise to significant moral hazard implications. The CDSF is then simulated for the case of Uganda during the period 1988-2002, demonstrating its effectiveness in dealing with Uganda's severe exposure to price shocks and negative terms of trade.
5
Valli, Silvia. "Public debt sustainability and EMU : theory and some evidence." Thesis, University of Warwick, 1999. http://wrap.warwick.ac.uk/48975/.
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The thesis focuses on the interaction between default and inflation risk on public debt bonds. We lighten the trade-off between flexibility to adverse shocks and credibility, in the debt management field, and identify the conditions under which the credibility effect can be dominant. EMU is now fully operating, including most of the European candidates that have been let in under a more relaxed interpretation of the Maasticht Treaty criteria. In particular, the debt criterion originally set at 60% of the GDP, was reinterpreted to require a debtlGDP ratio declining towards the target. As some of the countries have levels of debt above 100% of GDP (Belgium and Italy) and as European Central Bank is committed to price stability, what does giving up inflation imply for post-EMU debt management?
6
Jain, Sandeep. "The Effects of Austerity on the Sustainability of the Greek Public Debt." Thesis, KTH, Industriell ekonomi och organisation (Inst.), 2013. http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-125595.
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The current Greek debt crisis has forced the Greek government to adopt austerity measures. In this paper, the most favourable debt reduction strategies among all the other strategies, for both Greece and its creditors will be examined. These strategies have been recently suggested in the economic world, to help achieve deficit reduction and enhance the growth rate of Greece. This is very important for the economic world - to avoid the insolvency of Greece and to find the best debt reduction strategy which is favourable for both the parties, so that the Greek public debt-to-GDP ratio can reach a level of sustainability within a reasonable timespan. In an endeavour to answer the research question, a simulation framework has been carried out based on the economic model as given by Cline, (2011). When using this economic model, g has been made endogenous and it is dependent on the extent of austerity. This has been taken into consideration while carrying out the simulation exercises for this paper. Furthermore, three different debt reduction strategies (the lowering of interest rates, debt write-off and increasing the primary surplus) have been implemented, considering the different scenarios of the economy, when executing these simulation exercises. After carrying out the simulation framework, it has been concluded that the further reduction of the interest rate would be the most favorable debt reduction strategy for both Greece and its creditors. This interest rate strategy would not only lower the Greek public debt-to-GDP to a sustainable level within a reasonable time period, but will also keep the growth rate positive in the long run during this period of weak economic recovery.
7
Lehasa, Mecha. "Determinants of sovereign borrowing choices in Sub-Saharan Africa." Master's thesis, Faculty of Commerce, 2020. http://hdl.handle.net/11427/33759.
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There is a growing and legitimate concern about sovereign debt increasing to unsustainable levels among the Sub-Saharan African (SSA) countries. Understanding the determinants of external debt to these countries influenced the direction of this study. The existing literature that was examined shed light mostly on the qualitative determinants of sovereign borrowing. In addition to existing empirical literature, there is a complimentary need to examine further the quantitative determinants of external debt. The researcher seeks to establish the extent to which the cost of borrowing (proxied by interest rate) explains the changes in the borrowing behaviour (proxied by external debt) among SSA countries. To achieve this objective, data from 36 SSA countries for the period 2009–2017 was used. The data were collected from International Debt Statistics compiled by the World Bank. External debt has been regressed against interest rate and other predictor variables. Hausman tests, robustness tests and collinearity tests were carried out to ascertain the validity of results. Interest rate is found to have a positive determining impact on external debt for all SSA countries aggregated: SSA countries excluding South Africa (SA); SSA excluding Nigeria; SSA excluding Nigeria and SA; SSA excluding debt-distressed countries, middle income and oilexporting countries. It does not have predictive power over changes in external debt for SSA excluding countries at high risk of distress; countries with low to moderate risk of distress; heavily indebted poor countries (HIPC) initiative post-implementation recipient countries; low income, other resource intensive and non-resource-intensive countries. External debt is also found to respond to changes in: gross national income (GNI); exports-to-imports ratio; primary income on foreign direct investment (FDI); reserves-to-imports ratio; FDI-to-GNI ratio; debt service-to-GNI ratio; interest arrears on long-term debt; short-term-to-total-debt ratio; and reserves-to-debt ratio for different country groupings. Different country groupings are found to have unique combinations of external debt determinants.
8
Ng'andwe, Mumbi Tenga. "An econometric assessment of external debt sustainability indicators in Zambia." Master's thesis, University of Cape Town, 2015. http://hdl.handle.net/11427/29035.
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Given inadequate domestic resources, as well as political and social pressures for development projects, Zambia will tend to run high budget deficits, and become very dependent on external debt. Thus debt sustainability becomes a major policy goal. This study investigated the significant macroeconomic factors that can influence external debt sustainability. These are GDP growth; Government revenues; exports; public expenditure; interest rate and exchange rate. The study employed simple Ordinary Least Squares (OLS) as well as a Vector Auto Regression (VAR) to capture dynamic relationships. The results revealed that exports and interest rates were positively related to sustainability. Revenues, GDP growth and Exchange rate were inversely related to debt sustainability. The total expenditure to GDP was inversely related to sustainability while current expenditure was positively related to sustainability probably due to prudent use of current expenditure on economic factors that stimulated growth. Capital expenditure was not significant to sustainability which may reflect the poor attention paid to infrastructure development in Zambia. The impulse response of the solvency indicator to revenue, GDP growth and total expenditure/GDP were generally negative over a ten year period. The policy implication is that in order to keep the debt sustainable, the debt resources must be used to maximise GDP growth and enhance public revenue. The impulse responses from exchange rate and interest rates to shocks on the solvency indicator were positive. The impulse response of SI from impulses in exports was negative. These are factors that are not completely in the control of the Government. The policy implication in contracting international debt is that Government should go for the lowest possible interest rate. Government should do its best to develop credible export promotion policies that can directly impact on the SI and also help to stabilize the exchange rate.
9
Tiftik, Mehmet Emre. "Assessing Domestic Debt Sustainability Of Turkey With A Risk Management Approach." Master's thesis, METU, 2006. http://etd.lib.metu.edu.tr/upload/3/12607632/index.pdf.
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This thesis analyzes the debt dynamics of Turkey and assesses the sustainability of fisscal policy. The assessment of fiscal policy follows the methodology of Garcia and Rigobon (2004). This approach focuses on the concept of debt sustainability from a risk management perspective and incorporates the effects of stochastic shocks to the economy in its assessment. The results suggest that a continuation of the present fiscal stances will lead to a fiscal unsustainability in Turkey. Furthermore, the results indicate that the properties of the debt dynamics are closely related to the spreads on both dollar denominated debt and YTL denominated debt. This thesis also provides an application of two traditional methodologies, such as Wilcox's (1989) methodology and Uctum and Wicken'
s (2000) methodology in order to assess the fiscal sustainability of Turkey.
10
Fincke, Bettina [Verfasser]. "Public debt sustainability : from roots to regressions [[Elektronische Ressource]] / Bettina Fincke." Bielefeld : Universitätsbibliothek Bielefeld, 2012. http://d-nb.info/1036111601/34.
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11
FREITAS, VICTOR ALMEIDA SANTOS DE. "FISCAL POLICY RESPONSE AND PUBLIC DEBT SUSTAINABILITY IN BRAZIL, 1994-2008." PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRO, 2010. http://www.maxwell.vrac.puc-rio.br/Busca_etds.php?strSecao=resultado&nrSeq=16708@1.
Full textAbstract:
O período de 1994 a 2008 caracteriza um momento da história fiscal
brasileira importante. Durante esse período observou-se uma retomada do controle
sobre o endividamento público, por meio de aumento expressivo do superávit
primário. Nesta dissertação essa correção é analisada, qualitativamente e
quantitativamente, mostrando que a condução austera da política fiscal foi capaz
de estabilizar a trajetória do endividamento. Salienta-se a importância de uma
posição primária que dependa dos movimentos da dívida, garantindo seu controle
em um patamar estável. Foram feitos testes tradicionais da literatura, em que se
avaliam diretamente os movimentos conjuntos das variáveis, e, adicionalmente,
testa-se o poder preditivo do endividamento sobre o superávit primário. Apesar de
encontrar evidências de que a correção na posição primária foi suficiente para
induzir o controle do movimento da dívida, a análise qualitativa aponta para uma
fonte de instabilidade, o crescimento constante das despesas primárias.The years between 1994 and 2008 were a very important period in Brazil s fiscal history. The government regained control over its public deficit during those 14 years by increasing its primary surplus to as much as 3% of gross domestic product. This dissertation analyses these changes through qualitative and quantitative methods, exposing the strict fiscal policies that led to control of public debt. It also places emphasis on the significance of an active fiscal policy on public debt levels and the size of the primary surplus. Traditional tests were utilized to evaluate fiscal policy sustainability and, in addition, tests how the primary surplus is impacted, and predicated, by public debt levels. While there is enough evidence showing how primary balance adjustments were sufficient for stabilizing the debt in question, qualitative analysis points out a new source of instability: the continuous growth of primary expenses.
12
Souza, Josà Jarbas. "Debt sustainability of northeastern states after fiscal responsibility law (2000 - 2008." Universidade Federal do CearÃ, 2011. http://www.teses.ufc.br/tde_busca/arquivo.php?codArquivo=8913.
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nÃo hÃThis paper aims to examine the Public Debt Sustainability of the Northeastern States Post Fiscal Responsibility Law (2000-2008). For this, we conducted a study of the series from 2000 to 2008, beyond the econometric methodology for panel data, to test the sustainability of fiscal policy employed in the states of the Northeast. The results showed the debt sustainability of the states in the Northeast around 3% of the state's GDP.
Este trabalho se propÃe a analisar a Sustentabilidade da DÃvida PÃblica dos estados nordestinos referente ao chamado perÃodo pÃs-Lei de Responsabilidade Fiscal (2000 a 2008). Para tanto, foi empregado a metodologia economÃtrica para dados em painel a fim de testar a sustentabilidade da polÃtica fiscal empregada nos estados da RegiÃo Nordeste. Os resultados obtidos evidenciaram a sustentabilidade da dÃvida daqueles estados em torno de 3% do PIB de cada estado. Isto significa, entre outras coisas, que os estado nordestinos mostram bons resultados atravÃs dos quais se poderia dizer que eles sÃo sustentÃveis.
13
Biggs, Michael Llewellyn. "Does South Africa's government debt threaten the sustainability of fiscal policy?" Master's thesis, University of Cape Town, 1996. http://hdl.handle.net/11427/10114.
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Bibliography: leaves 77-80.The South African government debt has risen alarmingly over the last decade, with the debt-to-GDP ratio increasing from 33% in 1985 to 57% in 1995. These debt movements, combined with historically high conventional deficits equal to 9.0% and 9.8% of GDP in 1993 and 1994 respectively, have cast doubt on the solvency of government. This paper considers the issue of government solvency by focusing on two questions. Firstly, "Are present fiscal policies sustainable?", and secondly, "What are the limits to future fiscal policy if government solvency is to be maintained?"
14
Maleckaite, Vaida. "Strategic Path to Fiscal Sustainability: Revenue Diversification and the Use of Debt By U.S. Municipal Governments." Thesis, University of North Texas, 2012. https://digital.library.unt.edu/ark:/67531/metadc149636/.
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This work explores the relationship between municipal government debt and revenue diversification using a prism of institutional and fiscal interactions, concentrating on revenue fungibility effects over time and on the role of state-imposed constraints. A diversified revenue structure tends to stabilize revenue levels by balancing income-elastic and inelastic revenue sources. The impact of such diversity has been the subject of much research on expenditure and service levels among state and local governments. Considerably less research has been conducted on its potential relationship with debt, although capital financing is a necessary and often-utilized mechanism for funding capital and operational spending for local governments. Since it is well known that debt payments are fixed in the short run, they require sufficient revenue adequacy through economic highs and lows. It is thus argued that local governments with more diversified revenue structures are better able to utilize debt financing since revenue diversity mitigates the risk of borrowing by providing for greater fiscal predictability in the long run. This hypothesis is tested on two samples - a large sample of cities in Massachusetts from 2000 through 2009, as well as a cross-state sample, encompassing the cities from the majority of U.S. states. The findings of both studies provide preliminary evidence on the influence of revenue diversification on the levels of municipal indebtedness. While the Massachusetts study reveals that revenue diversification is, indeed, a statistically significant determinant of debt per capita, which also has an indirect effect on property tax burdens, the cross-state study suggests that revenue diversification has a mitigating impact on certain state-imposed fiscal rules, further adding to its weight as a strategic financial management tool. Both studies also reiterate the importance of such fiscal capacity factors as fund balances, intergovernmental revenue, and the size of government, while also revealing some new interaction patterns among various state-imposed debt limitations.
15
HEINEMANN, RENATA ESTER. "FISCAL SUSTAINABILITY UNDER MONETARY POLICY SHOCKS: OBTAINING THE OPTIMAL DEBT ACCUMULATION PATH." PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRO, 2004. http://www.maxwell.vrac.puc-rio.br/Busca_etds.php?strSecao=resultado&nrSeq=5549@1.
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COORDENAÇÃO DE APERFEIÇOAMENTO DO PESSOAL DE ENSINO SUPERIORO trabalho consiste no desenvolvimento de um modelo para explicar a razão pela qual em algumas economias, especialmente a brasileira, se constata que, diante de choques à taxa de juros real, não se observa suavização da taxação, mas sim variações das alíquotas de impostos seguindo variações do ciclo econômico. Mostra-se assim formalmente a ligação entre a sustentabilidade fiscal e variações na carga tributária mais fortemente evidenciada em países em que houve a necessidade de passar por planos de ajustes fiscais - situação esta que pode sugerir a suscetibilidade à ocorrência de crise de confiança em relação ao cumprimento das obrigações de pagamento da dívida soberana, ou seja, probabilidade positiva de repúdio da dívida. A partir do modelo, é possível concluir que uma trajetória não fixa para a taxação pode se estabelecer como resultado ótimo diante de imperfeições no processo de estabilização fiscal. É um modelo que permite endogeneizar e escolher de forma ótima o superávit primário a cada período de tempo.
This paper develops a model to explain why in some economies, and especially in the Brazilian economy, we see evidence that taxation is not smoothened when facing real interest rate shocks. Instead, tax rates vary following the economic cycle. We show through a formal model the connection between fiscal sustainability and the variation of the level of taxation, a pattern more often observed in countries that went through fiscal adjustment plans - a situation that might suggest the possibility of occurrence of confidence crisis regarding the payment of sovereign debt, or a positive probability of debt default. From the model, it is possible to conclude that a non-constant taxation path can be established as an optimal result in such economies. It is a model that allows choosing endogenously and optimally the necessary fiscal superavit in each period of time.
16
Ong, Kian H. "Modelling the sustainability of public sector debt and net foreign asset positions." Thesis, University of Nottingham, 2016. http://eprints.nottingham.ac.uk/33798/.
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The European Sovereign Debt crisis in 2010 not only brings the sustainability of public finance to the forefront, but also the sustainability of external balances. Chapter 2 of this thesis proposes an approach to measuring fiscal sustainability of a country; Chapter 3 investigates the divergent external imbalances in Europe, and Chapter 4 proposes the measures of external sustainability for a country. Chapter 2 proposes a measure of public sector debt sustainability based on probabilistic statements of various future events relating to debt sustainability. It illustrates the approach using data for 10 developed countries over the period 1958-2010. The approach accommodates various alternative definitions of sustainability, which is new in the literature. The approach employs a Global cointegrated Vector Auto Regression model, modelling both long-run relations and cross-country interactions. Applying our approach on an empirical sample including eight EU countries, shows that our measures offer a multi-dimensional description of fiscal sustainability. Chapter 3 characterises the long-run time series properties of net foreign assets in twelve EU countries over the period 1970-2011. Using a multi-country restricted VAR model, we establish that shocks to net foreign asset persist over time. We then measure the size and the source of the permanent effects of the shocks. We find, the current account drives the net foreign assets in the long-run. Unanticipated changes in cross-border finance flows have a significant permanent effect on net foreign assets across the EU economies, more than output shocks and dollar exchange rate shocks. Chapter 4 measures the likelihood of sustainability of the net foreign assets and the current accounts. In response to the sovereign debt crisis, the European Commission includes both the stock and flow external balances under its surveillance. We illustrate our measure by implementing the introduced policy. Our sustainability likelihoods are based on a formal model incorporating behavioural feedbacks and cross-country movements. Illustrating on the EU empirical sample adopted in Chapter 3, our measures not only describe countries' sustainability of external balances but also serve as early warning indicators.
17
Paret, Anne-Charlotte. "Fiscal vulnerability and sustainability issues in emerging market countries." Thesis, Aix-Marseille, 2017. http://www.theses.fr/2017AIXM0126.
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L’objectif de cette thèse est de mieux appréhender les déterminants du risque souverain et de la soutenabilité budgétaire des pays émergents, afin d’identifier les éléments qui permettraient à ces pays de se protéger d’un tel risque. Nous mettons en place des outils économétriques et théoriques adaptés aux particularités de ces pays. Ces derniers sont ensuite déclinés pour tenter d’anticiper les épisodes de défaut souverain sévère via un modèle à changement de régime de type "early warning", pour effectuer des simulations stochastiques de ratio de dette souveraine à moyen-terme et évaluer les effets de politiques budgétaires définies à cet horizon et enfin, pour caractériser la distribution du ratio de dette externe de ces pays. Cette thèse entend ainsi identifier les pays qui semblent les plus exposés au risque souverain et définir des recommandations de politique économique qui prennent en compte l’hétérogénéité au sein du «bloc» des pays émergents et au cours du tempsThe objective of this thesis is to obtain a better understanding of the determinants of sovereign default and medium-term sustainability inemerging market countries, so as to define ways through which they may protect themselves from these sovereign risks. We provide econometric tools and a theoretical model that are adapted to these countries’ specific features. This aims to anticipate severe sovereign default episodes through a regime switching early-warning type model, to assess medium-term public debt prospects and the impact of defined fiscal policies through stochastic debt simulations and to characterize the distribution of the external debt ratio of emerging market countries. It eventually enables to identify the countries that are the most exposed to sovereign risk and to draw up a set of policy recommendations, allowing for a differentiation within this heterogeneous block of countries and through time
18
Plocek, Tomáš. "The Sustainability of Government Deficits: Old Vs. New Europe." Master's thesis, Vysoká škola ekonomická v Praze, 2010. http://www.nusl.cz/ntk/nusl-71779.
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This work analyses fiscal sustainability and position of old and new members of EU and offers some fiscal policy implications to deal with debt reduction in the aftermath of the current fiscal crisis in the EU. Fiscal policy of Old European countries is different from fiscal policy of the new members. Due to different historical development New European members have lower debt and lower GDP per capita. Many policymakers in New Europe tried to increase GDP of their countries by generating government deficits. On the other hand Old European countries are already having large debts and current fiscal crisis is one result of this fact. The recent fiscal crisis in Europe raised the question what is sustainable fiscal policy and how to achieve it. Sustainability of the policy can be divided into three groups: short term, medium term, and long term. In short term, fiscal policy is sustainable, when government is able to issue and sell government bonds. Otherwise it defaults. In medium term, fiscal policy is sustainable when debt to GDP ratio is constant or decreasing. Situation in long term is very similar to situation in medium term. The difference is in time. Long term fiscal policy is sustainable if debt to GDP ratio converges to some finite number. All the definitions are problematic and problem arises basically from fact that variables that are part of the definitions are volatile. Fiscal policy that might seem to be sustainable in times of economic expansion may become unsustainable even in short time. Exactly this thing happened in Ireland. Ireland shows another problem of sustainability definitions. The problem is that private debt can increase public debt and even threaten its sustainability. Many countries were saving their financial sector which was very expensive and this practice is increased the debt in those countries very fast. Probably the most important indicator of fiscal sustainability is interest rate on government bonds. Reason is that price of the bonds is based on different risks that are in the assets. Countries with sustainable fiscal policy are paying lower interests than countries with unsustainable. This is reason why we tried to explain variation of interest rate on 10 years government bonds by empirical models. Two models were based on fixed effects panel data estimations and one model was based on ordinary least squares model. The panel data model showed that there was and still is huge difference between Old European and New European countries. Old Europe was viewed by markets as one segment which is relatively risk free. This lead to situation, that most important factor driving interest rates in Old Europe is the risk free rate on the German bonds. On the other hand, interest rates in New European countries are influenced by many more indicators. Most important indicator in New Europe is GDP growth and sustainability of foreign exchange reserves. Based on results of the model we came to conclusion that there is high chance that markets will start to differ among Old European countries and this could lead to increase of interest rates in some Old EU members, a conclusion which is to some degree being verified by the increased spreads between German government bonds on one hand, and Italian and Spanish bonds on the other hand in the first few weeks of August 2011. Our conclusions also suggest that the position of New Europe may stand similar in current situation. If it is true policymakers may try to adapt policy of New European countries to increase its sustainability and improve the key variables. The conclusions from this work bring several policy recommendations for improving the fiscal sustainability in Europe. First and probably the most important recommendation to fiscal policy is that policymakers should not underestimate the indicators of fiscal sustainability, which was a common practice in recent history. Countries with high GDP growth were generating large deficits and debt to GDP ratio was constant. Problem is that in recession indicators that were influencing interest rate changed and fiscal policy become unsustainable in many cases. Conclusion for fiscal policy is that policymakers should run responsible fiscal policy in good times to avoid troubles in bad times. Governments should also understand full price of deficits, because increased deficits also increase interest rate that governments have to pay on existing debt.
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Considine, John. "Issues in fiscal deficit measurement : the case of Ireland." Thesis, University of York, 1998. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.245872.
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Філатова, Ганна Петрівна, Анна Петровна Филатова, and Hanna Petrivna Filatova. "Управління борговою стійкістю країни." Thesis, Університет митної справи та фінансів, 2018. http://essuir.sumdu.edu.ua/handle/123456789/71241.
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Однією з нагальних проблем на сучасному етапі розвитку України є надмірне нарощування державного боргу, що має низку негативних наслідків для фінансової системи країни. При цьому, особлива увага звертається саме на розроблення дієвої системи управління борговою стійкістю. Управління борговою стійкістю має за мету досягнення стабільного економічного розвитку держави, зберігання фінансової незалежності, забезпечення необхідних темпів приросту ВВП, стримування інфляційних процесів, забезпечення повної зайнятості тощо.
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Філатова, Ганна Петрівна, Анна Петровна Филатова, and Hanna Petrivna Filatova. "Аналіз боргової стійкості країни." Thesis, Міжнародний центр наукових досліджень, 2018. http://essuir.sumdu.edu.ua/handle/123456789/71190.
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Процес управління борговою стійкістю країни може бути більш ефективним, якщо будуть отримані характеристики взаємозв’язків між показниками державного боргу та такими показниками як ВВП, сума експорту товарів та послуг, рівень безробіття, рівень інфляції тощо. Встановлення таких зв’язків дозволяє проаналізувати результат взаємного впливу економічних явищ, а також спрогнозувати їх подальші зміни.
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Vieira, Carlos Manuel Rodrigues. "The sustainability of fiscal policies : a study of the European Union." Thesis, Loughborough University, 1999. https://dspace.lboro.ac.uk/2134/10548.
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The concern with persistant high government deficits and debts has been one of the most controversial and discussed issues among academics and policymakers during the last two decades of the twentieth century. Despite recent efforts towards fiscal consolidation in most developed countries, expensive welfare programs and unfunded social security systems can exert a considerable strain on public finances over the next generations. The main objective of this thesis is to investigate whether current fiscal policies are sustainable, that is, able to guarantee the government's solvency, and what are the consequences of unsustainability on monetization, inflation and interest rates. The first question is tested by examining the long-run univariate and multivariate stochastic properties of the fiscal variables, as implied by the intertemporal budget constraint. The second question is assessed within a vector autoregressive framework, which allows the consideration of feedback mechanisms often neglected in the literature. More specifically, the econometric methodology employed throughout the study comprises recent developments in cointegration analysis, panel data techniques, bounds-ARDL procedure, and Granger non-causality. The empirical analysis is focused on a comparative study of six core members of the European Union, during the post-war period: Belgium, France, Germany, Italy, Netherlands and United Kingdom. The evidence suggests that only Germany and the Netherlands have been following a sustainable fiscal path, although the latter remains vulnerable to the consequences of an ever-increasing stock of debt. However, unsustainable fiscal policies do not seem to have imposed an excessive burden on monetary policies, as predicted by the conventional economic theory. Apart from Italy, there is no empirical evidence that high deficits necessarily imply monetary financing, growing inflation and rising interest rates.
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Antonakakis, Nikolaos. "Sovereign Debt and Economic Growth Revisited: The Role of (Non-)Sustainable Debt Thresholds." WU Vienna University of Economics and Business, 2014. http://epub.wu.ac.at/4321/1/wp187.pdf.
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Contributing to the contentious debate on the relationship between sovereign debt and economic growth, I examine
the role of theory-driven (non-)sustainable debt-ratios in combination with debt-ratio thresholds on economic growth. Based on both dynamic and non-dynamic panel data analyses in the euro area (EA) 12 countries over the period
1970-2013, I find that non-sustainable debt-ratios above and below the 60% threshold, have a detrimental effect on short-run economic growth, while sustainable debt-ratios below the 90% threshold exert a positive influence on short-run economic growth. In the long-run, both non-sustainable and sustainable debt-ratios above the 90% threshold, as well as non-sustainable debt-ratios below the 60% compromise economic growth. Robustness analysis supports these findings, and provides additional evidence of a positive effect of sustainable debt-ratios below the 60% threshold, as predicated by the Maastricht Treaty criterion, on (short- and long-run) economic growth. Overall, these results suggest that debt sustainability in addition to debt non-linearities should be considered simultaneously in the debt-growth nexus. In addition, the results indicate the importance of a timely reaction of fiscal policy in countries with non-sustainable debts, as implied by fiscal rules, in an attempt to ensure fiscal sustainability and, ultimately, promote long-run economic growth. (author's abstract)Series: Department of Economics Working Paper Series
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Mohd, Daud Siti Nurazira. "Issues in international economics : an empirical study on the sustainability, external debt and reserves management." Thesis, University of Southampton, 2009. https://eprints.soton.ac.uk/72293/.
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This thesis consists of three essays related to balance of payment or the external sector issues. These three essays include an analysis of a country’s current account and fiscal sustainability position, the role of external debt in economic growth, and the reserves and debt management. The main intention of the first essay (comprising Chapter 2) is to analyze the sustainability of the current account and fiscal position for high, middle and low income countries. This empirical analysis makes use of various panel unit root and cointegration tests, as well as fixed and random effects estimators. The results indicate that there is evidence of current account sustainability only for high-income countries indicating that the intertemporal budget constraints are being maintained. In contrast, the middle-income and low-income countries are found to be in an unsustainable current account position. In addition, this paper also finds that all groups of countries have a slow phase of convergence towards equilibrium which suggests that all countries are vulnerable to any sudden shock or stop. Besides that, there is evidence of sustainability on fiscal policy for the high and middle groups of countries. Chapter 3 investigates the issue of whether external debt contributes to expansion in economic growth. This chapter attempts to answer this question by analyzing 31 developing countries over a period of 36 years (1970-2005). The results reveal that the accumulation of external debt is associated with a slowdown in the economies of the developing countries. Besides this, we find evidence that debt service ratio does not crowd out the investment rate in developing countries. In other words, even though the external debt is negatively associated with economic growth, countries are found to be safe from being in the debt overhang hypothesis. However, the negative effect could be interpreted as the main symptom of a country before it becomes involved in the debt overhang problem. In addition, fiscal balance, iii government revenue, openness, and domestic credits are found to have a positive effect on investment and, to a lesser extent, economic growth. Furthermore, there is evidence to support the existence of spatial dependence in the growth model, suggesting the existence of positive spillover effect of growth among the neighbouring countries. This suggests that countries are found to have positive correlation with their neighbours’ economic growth. The main analytical contribution of the final chapter, which is chapter 4, is to analyze the cost of jointly holding reserves and sovereign debt decision. By analyzing the impact of holding reserves and sovereign debt on sovereign credit ratings, this provides the evidence of the costs of holding reserves and debt with respect to credit risk. As predicted by theory, the international reserves-holding is associated with good sovereign credit ratings as well as lower credit risk while the sovereign debtholding leads to a lower sovereign credit rating and high credit risk. This implies that reducing (repaying) their sovereign debts is the best decision for countries to keep and maintain a good credit risk reputation. Meanwhile, the benefit of holding reserves has crowded out the cost of holding short-term debt, resulting in a net positive effect on sovereign ratings. This could imply that a country should hold more reserves with regard to the level of short-term debt which is a highly vulnerable liability for a country. The results reveal that the adequate level of international reserves in month of imports is slightly higher than with the conventional rule which at 3 month of imports.
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Павловська, Є. О. "Рівень боргової безпеки та рівень забезпечення боргової стійкості України." Thesis, Гельветика, 2013. http://essuir.sumdu.edu.ua/handle/123456789/59352.
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Головними показниками фінансової стабільності країни виступає обслуговування та погашення державного боргу у визначений термін. Якщо країна виконує такі вимоги, то перед нею відкривається у повному обсязі можливість отримання нових позик на вигідних умовах, а також за країною закріплюється імідж надійного позичальника.The main indicators of financial stability performs servicing and repayment of public debt during this period. If a country fulfills these requirements, then before it opens fully getting new loans on favorable terms, as well as the countries fixed image as a reliable borrower.
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Lindkvist, Lovisa, and Olle Saric. "Sustainability Performance and Capital Structure : An analysis of the relationship between ESG rating and debt ratio." Thesis, Umeå universitet, Företagsekonomi, 2020. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-172993.
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This thesis investigates the relationship between sustainability performance and capital structure, measured using the ESG (environmental, social and governance) rating and the debt ratio. In the pursuit of analysing the relationship between the ESG rating and the debt ratio, this study investigates publicly listed companies within the EU/EEA due to its mutual legislative framework on sustainable finance. This research has the intention of shedding light upon if a company can use sustainability ratings to alter their optimal debt levels, operate at higher efficiency with access to cheaper capital, and help the manager maximize firm value. This could help them in decision making processes of financing their business through receiving a better understanding of how the ESG rating affects the capital structure. This knowledge would allow management to better understand how the investments necessary in acquiring the ESG rating affect firm value as well as how they affect the dynamics of financing the firm. This is a deductive and quantitative research based on secondary data, gathered using Thomson Reuters (Eikon) database. Furthermore, this research is a cross-sectional study analysing companies in year 2019. No clear relationship between the two concepts has been found, arriving at the conclusion that the optimal capital structure is not influenced by sustainability initiatives. However, sustainability initiatives should always be encouraged since these generate other beneficial effects. Finally, this research contributes to the current field of knowledge on the topic through analysing the results using the Trade-off Theory, Pecking Order Theory, Agency Theory, Legitimacy Theory and Stakeholder Theory. The results are somewhat aligned with the Trade-off Theory of capital structure and the Pecking Order Theory as well as other more traditional financial theories. One can conclude that sustainability performance is not of importance when it comes to the firm's ability to raise capital or the firm’s capital structure. This tells us that there is still a long way to go and that action needs to be taken before sustainability becomes an essential and well-integrated factor considered in investment decisions. The results may be undesirable, but they also give a fair picture of the financial sector’s priorities as of now and highlight the need for sustainable objectives to align with financial profitability.
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Антонов, Максим Сергійович, Максим Сергеевич Антонов, and Maksym Serhiiovych Antonov. "Управління борговою стійкістю держави." Thesis, Сумський державний університет, 2017. http://essuir.sumdu.edu.ua/handle/123456789/55586.
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У роботі уточнено сутність та відмінності понять «стійкість державного боргу» та «боргова стійкість держави»; досліджено систему, світовий та вітчизняний досвід управління борговою стійкістю держави; виявлено найбільш важливі екзогенні фактори впливу на неї; розроблено систему ризик-орієнтованих індикаторів її оцінювання; розроблено методичні засади раннього прогнозування її втрати, визначення періодів та потенційних тригерів виникнення боргових криз; обґрунтовано засади створення в Україні незалежної фіскальної інституції; вдосконалено механізм застосування в Україні системи фіскальних правил; оцінено відповідність національної практики розкриття інформації про боргову сферу в Україні принципам Кодексу фіскальної прозорості Міжнародного валютного фонду, розроблено рекомендації щодо удосконалення механізму аудиту ефективності державного боргу.В работе определена сущность долговой устойчивости государства как характеристики его способности выполнять долговые обязательства, не увеличивая долговой нагрузки, не прибегая к мерам по его реструктуризации или списании с поддержанием на достаточном уровне ликвидности, платежеспособности и темпов экономического роста, приемлемого уровня рисков. Предложена система многофакторных регрессионных моделей зависимости соотношения объема государственного долга к ВВП от макроэкономических (демография и рынок труда, реальный сектор, платежный баланс) и финансовых факторов (потоки капитала, денежно-кредитный рынок, банковская система и доступ к финансам). Это позволило комплексно оценить перекрестное влияние факторов в пределах долговых спиралей. Разработан научно-методический подход к раннему прогнозированию потери долговой устойчивости государства, предусматривающий диагностику с помощью карт Шухарта периодов и потенциальных триггеров возможного возникновения долгового кризиса с последующей верификацией методом Ирвина. Для оценки долговой устойчивости государства разработана система рискориентированных индикаторов, сгруппированных в соответствии с целевыми таргетами ее поддержания (ликвидность, платежеспособность и уязвимость к рискам), предложены механизмы периодического и интегрального определения их устойчивости через статистические параметры вариации с лагами. Разработаны структурно-логическая схема функционирования в Украине независимости фискальной институции, ее приоритетные задачи, функции, механизм координации ее деятельности с другими органами. В контексте применения фискальных (долговых) правил в Украине предложено: 1) соединить «золотое» правило с долговым правилом ограничения квоты долга в ВВП и структурного дефицита в ВВП в среднесрочной перспективе; 2) комплексно реализовать правила доходов и расходов в долгосрочной перспективе и меры их организационно-экономического обеспечения. Оценено соответствие практики раскрытия информации о долговой сфере в Украине принципам Кодекса фискальной прозрачности Международного валютного фонда (фискальная отчетность, фискальное прогнозирование и бюджетирование, анализ и управление фискальными рисками), разработаны рекомендации по улучшению аудита эффективности государственного долга.
The essence and differences between the concepts of «sustainability of public debt» and «state debt sustainability» were investigated in work; the system, international and national experience of debt sustainability management were researched; the most important exogenous factors influencing it were founded; the system of riskbased indicators of assessment, methodical bases for early prediction of debt crisis, determination and its potential triggers were developed; principles of creation in Ukraine an independent fiscal institutions were grounded; the mechanism of fiscal rules in Ukraine was improved; compliance of national practices of informational disclosure about debt sector in Ukraine with the principles of fiscal transparency code of the IMF was assessed, the recommendations on the improving of public debt effectiveness audit were developed.
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Філатова, Ганна Петрівна, Анна Петровна Филатова, and Hanna Petrivna Filatova. "Боргова стійкість країни та її оцінка." Thesis, Міжнародний центр наукових досліджень, 2017. http://essuir.sumdu.edu.ua/handle/123456789/65634.
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Нині доволі розповсюдженим інструментарієм, що використовується для протидії утворення надмірного боргового навантаження, є аналіз боргової стійкості. За допомогою якого встановлюються взаємозв’язки між обсягами і структурою державних позик, з одного боку, та нинішнім і майбутнім потенціалом країни (спроможністю) обслуговувати накопичений борг, з іншого.
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Філатова, Ганна Петрівна, Анна Петровна Филатова, and Hanna Petrivna Filatova. "Методичні підходи до оцінювання боргової стійкості країни." Thesis, Друкаряня "Друкарик", 2017. http://essuir.sumdu.edu.ua/handle/123456789/65662.
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Актуальним питанням сьогодення є пошук об’єктивної методики оцінювання боргової стійкості країни. Система індикаторів боргової стійкості є інструментом оцінки спроможності фінансової системи країни виконувати власні боргові зобов’язання.
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Allam, Mohammad Zaheer. "Urban Resilience and Economic Equity in an Era of Global Climate Crisis." Thesis, The University of Sydney, 2019. https://hdl.handle.net/2123/21380.
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As the impacts of climate change are accelerated, due to continued emissions generating activities of industrialised nations, there is an increasing need for revised policies and climate change mitigation programs. The latter is, however, out of reach to vulnerable economies which are financially unequipped to afford such programs. In view of this, most turn towards debt financing, which can pose a risk to their economies in the long term as critical urban assets are used as collaterals; leading to unsustainable debt levels, posing a risk to the liveability of cities. This hybrid thesis explores the thematic of economic inequity from the context of colonialism and outlines how former colonial empires have exploited former colonies; which are today mostly classified as vulnerable economies, for the benefit of industrialisation -which helped in strengthening the economic agendas of colonial empires while also contributing substantially to the climate change. With this backdrop, the thesis explores how today, in an era of post-colonialism where an economic disparity exists due to colonialism, the thematic of climate change can be addressed while both bridging the economic divide between developed and least developing economies and socially empowering communities. The hybrid thesis, featuring one journal publication, underlines the above thematic and proposes the use of a revised model surfing on the concept of Emissions Trading System (ETS) and Smart Contracts through the Blockchain, while supporting the cultural attributes of vulnerable economies -which can be unique economic dimensions.
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Кравцов, Д. О. "Управління борговою стійкістю держави." Master's thesis, Сумський державний університет, 2021. https://essuir.sumdu.edu.ua/handle/123456789/87014.
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Оцінка боргової стабільності держави є важливим елементом функціонування та розвитку сучасної держави. Дослідивши це питання, стає зрозуміло, чи зможе держава справитись зі своїм борговим навантаженням, сплачувати борги та гідно триматися на міжнародній арені. Також, за допомогою аналізу боргової стійкості встановлюються зв'язок між обсягом і структурою державних запозичень, і є можливість встановити потенціал країни в обслуговуванні накопиченого боргу держави. Рівень державного боргу в Україні є одним з найбільших у Європі. Велика недовіра великих кредитних організацій світу до України, постійні політичні кризи, корупційні схеми це все є наслідком підвищення державного боргу.
Метою кваліфікаційної роботи є вивчення теоретичних і практичних аспектів управління борговою стійкістю держави та обґрунтування можливостей оптимізації боргового навантаження.
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Hileman, Garrick. "Sovereign debt sustainability, financial repression, and monetary innovation : Britain and currency black markets in the mid-20th century." Thesis, London School of Economics and Political Science (University of London), 2015. http://etheses.lse.ac.uk/3295/.
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The 1940s were the last time sovereign debt levels for many advanced economies were comparable to recent times. Following the Second World War the United Kingdom is viewed as having achieved the highest public debt to income ratio while still avoiding default of any country in last three centuries. However, previous research on the UK during this period has largely overlooked British post-war debt sustainability and the role played by financial repression. This thesis presents a conceptual framework of the mechanisms for achieving sovereign debt sustainability, along with their resultant political economy trade-offs. The conventional historical view that the UK avoided default on its sovereign financial agreements following the Second World War is re-examined and Britain is found to have ‘partially defaulted’ in the years following the Second World War. This thesis provides a historical narrative of the intellectual origins and policies of modern financial repression in Britain and presents alternative qualitative and quantitative measurements of financial repression. Monetary innovation accompanied 1930s-40s financial regulation, particularly the development of sophisticated currency black markets in New York and Switzerland. Statistical analysis of new daily time series data from these markets provides a quantitative market perspective on historical turning points during the 1940s. A currency taxonomy and discussion of the causes behind the rise and decline of alternative currencies is presented. While alternative currencies also featured during the 1940s they were arguably less numerous and less innovative than during the Great Depression period. The British case ultimately illustrates the complex dynamics and trade-offs of sovereign debt sustainability vis-à-vis other competing policy objectives, such as a desire for open markets and economic growth, financial stability, and geopolitical priorities.
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Becker, Torbjörn. "Essays on stochastic fiscal policy, public debt and private consumption." Doctoral thesis, Handelshögskolan i Stockholm, Samhällsekonomi (S), 1995. http://urn.kb.se/resolve?urn=urn:nbn:se:hhs:diva-882.
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This dissertation consists of five separate essays (and a short introductory chapter) that analyze the effects of debt policy on private consumption. Essay 1: Government Debt and Private Consumption: Theory and Evidence. The Ricardian equivalence theorem has been widely debated since (at least) the seventies. The theorem states that households should not change their consumption path in response to changed timing of taxes, given the path of government consumption. In this essay, theoretical models giving rise to the equivalence result as well as models predicting deviations from debt neutrality are presented. In general, the Ricardian models are based on unrealistic assumptions, such as infinite horizons, perfect capital markets and lump-sum taxes. The issue of Ricardian equivalence is thus perhaps better viewed as a question concerning to what extent the equivalence hypothesis is a reasonable approximation of the real world. This could only be established by empirical studies. To formulate a test of Ricardian equivalence, it is however vital to extend the standard analysis in deterministic models to stochastic models. In a stochastic model we need to incorporate the fact that agents have to make predictions about future levels of government consumption, and that public debt might be a useful predictor for that purpose. It is therefore necessary that an empirical study distinguishes between debt as a potential source of net wealth, which is the concern of the equivalence proposition, and debt's role as a signal of future levels of government consumption, which is due to the stochastic nature of the world. It is argued that there are few empirical studies that make this distinction, and in case the distinction is made, the evidence is in favor of the Ricardian equivalence proposition, namely that public debt is not net wealth to households. Changing the timing of taxes will therefore not change private consumption. In other words, although the Ricardian equivalence hypothesis is burdened with unrealistic assumptions, it seems (historically) to provide a reasonable approximation of actual data. Essay 2: An Investigation of Ricardian Equivalence in a Common Trends Model. A common trends model for gross national income, private consumption, government consumption and net taxes is estimated on US data. The system has two cointegrating vectors and thus two common stochastic trends, interpreted as a technology trend and a public sector trend. The two temporary shocks are interpreted as a private demand and government financing shock, respectively. Theoretical models suggest that the two cointegrating vectors could be due to the private and public sectors' intertemporal budget constraints. We find two co-integrating vectors, as predicted by no-Ponzi game constraints on the sectors. However, a stronger version of the no-Ponzi game constraint is a solvency condition, which implies particular co-integrating vectors. These cointegration vectors are both rejected for the sample period, indicating that the public sector will not be able to repay its debt if the current policy is maintained. However, the private sector is at the same time accumulating wealth, which is consistent with predictions from a Ricardian model. Further, the equivalence theorem predicts that private consumption should be unaffected by financing shocks. Data, however, indicate that there is a significant short run effect on both income and private consumption from the financing shock, but the effect indicates that increasing taxes is accompanied by increasing private consumption, contrary to both standard Ricardian and Keynesian models. In the theoretical world, this type of pattern could be generated in models with risk averse individuals and uncertainty about future taxes. Essay 3: Risky Taxes, Budget Balance Preserving Spreads and Precautionary Savings. This essay analyzes the effects on consumption from changes in the riskiness of taxes. It starts by reinterpreting the Sandmo [1970] paper on general capital income risk to the case of risky capital taxation. In his framework the concept of a mean preserving spread (MPS) is used for the risk analysis. In connection with risky taxes it is however possible to explicitly connect the tax risk with the government's budget constraint. In this essay the concept of a budget balance preserving spread (BBPS) is developed and used for the analysis of stochastic taxes. The essay is concluded with a comparison of the effects that a MPS and a BBPS has on consumption decisions. It is shown that the comparative statics results for a BBPS could be different from the results obtained with a MPS. Essay 4: Budget Deficits, Tax Risk and Consumption. This essay analyzes the effects of budget deficits on consumption when individual taxes are stochastic. It is shown that the co-movements between budget deficits and private consumption will depend on how risk averse individuals are. In the case of lump-sum taxes, it is sufficient to assume that individuals have a precautionary savings motive to obtain the result that consumption today will decrease with increased disposable income today. Furthermore, if we use a time separable iso-elastic utility funcition, the standard analysis of capital income risk predicts (precautionary) savings to increase with increased risk if the coefficient of relative risk aversion is greater than one. This is no longer sufficient when the risk is due to uncertain capital income taxes. In general, the coefficient must be greater than one to obtain precautionary savings in response to the greater risk implied by a budget deficit. The results in the paper are consistent with Ricardian equivalence only for some specific utility function, but not in general. However, in the same way, the results are consistent with standard Keynesian models that display a positive relation between debt and private consumption only for certain utility functions, and could equally well generate the opposite result for individuals that are enough risk averse or prudent, without changing the expected value of government consumption. In other words, if future taxes are uncertain, increased disposable income in the present period will decrease present consumption, if households are prudent enough. Essay 5: Budget Deficits, Stochastic Population Size and Consumption. This paper analyzes the effects on present consumption of budget deficits under different assumptions regarding demographics. In the first part, birth and death rates are deterministic, and in the second part, birth rates are assumed to be stochastic. In the case of a deterministic population size, an increase in public debt raises present consumption, if the (deterministic) birth rate is greater than zero, while with a zero birth rate we obtain debt neutrality. This is consistent with the results in Blanchard [1985] and Buiter [1988]. However, for the case of stochastic birth rates, it is shown that we can obtain the result that present consumption will decrease when public debt is increased, both when we have a zero expected birth rate, and when the expected population size is assumed to be constant, so that the expected birth rate is positive and equal to the death rate. The explanation is that with an uncertain birth rate, the future tax base is uncertain, which makes per capita taxes uncertain in the future. Shifting taxes to the future thus implies greater uncertainty about future net income, and induces precautionary savings.Diss. Stockholm : Handelshögsk.
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Zajíček, Jakub. "Udržitelnost veřejných financí v EU: komparace SRN a Velké Británie." Master's thesis, Vysoká škola ekonomická v Praze, 2015. http://www.nusl.cz/ntk/nusl-264507.
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Diploma Thesis deals with the comparison of public finances of the United Kingdom and the Federal Republic of Germany from 2000 to 2014. It focuses on the period of financial and economic crisis after 2008. This thesis aims to identify the impact of the financial and economic crisis on the sustainability of public finances of both countries. It also identify the reasons for the different development of public finances in both countries. The practical part is divided into three chapters. The first chapter deals with the period of 2000-2010. The second chapter focuses on consolidation of public finances in the years 2010-2014. The last chapter deals with the current development and sustainability of public finances of both countries.
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Ezer, Mehmet Onur. "Essays in Macroeconomic and Macroprudential Policies." Thesis, Boston College, 2018. http://hdl.handle.net/2345/bc-ir:108089.
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Thesis advisor: Peter IrelandThesis advisor: Christopher Baum
In this dissertation, I focus on macroeconomic and macroprudential policies. In Chapter 1, I study the effectiveness of macroprudential policy tools on bank risk. The findings show that although macroprudential policy tools can stabilize the financial system, under certain conditions, they might have perverse effects. In Chapter 2, I examine monetary aggregates, and show that once measured correctly, they can be useful in gauging the stance of monetary policy. In Chapter 3, by studying the deter- minants of sovereign debt crises, I aim at improving our understanding of sovereign debt distress, and also strengthening the toolkit for crisis prevention. Chapter 1: Following the 2007-2009 financial crisis, there has been an increase in the use of macroprudential policy tools – such as loan-to-value ratio caps and interbank exposure limits – to achieve financial stability. Existing research on the effectiveness of macroprudential policy has focused on country-level variables such as total credit growth and house price inflation. In “The Effectiveness of Macropruden- tial Policy on Bank Risk,” I study how the effectiveness of macroprudential policy varies across banks and policy tools. Using system GMM on bank-level data from 30 European countries for the time period between 2000 and 2014, I document that stricter regulation in the form of exposure limitations tends to decrease banks’ risk levels whereas capital-based tools tend to induce higher risk-taking. After a policy tightening, loan loss provisions and non-performing loans ratios of banks suffering losses can increase substantially, up to five percentage points, while they are likely to decrease for profitable banks. Constraining activities by stricter regulation can lead to a search for yield. Therefore, policy designers should pay particular attention to the increase in risk-taking following policy tightening, especially by banks suffering losses. Chapter 2: It is crucial for policymakers to successfully gauge the stance of mon- etary policy and understand the mechanisms through which it affects the economy. Conventional models focus on interest rates alone, and omit monetary aggregates from policy discussions. In “Do Monetary Aggregates Belong in a Monetary Model? Evidence from the UK,” I examine whether augmenting the measure of monetary policy with monetary aggregates helps in drawing more robust links between policy and economic fluctuations. After constructing the Divisia money index for the United Kingdom, I employ structural vector autoregression to identify two different episodes of UK monetary policy regimes. Inclusion of this (correct) measure of the quantity of money and disentangling money supply from money demand remedy the price and liquidity puzzles which frequently appear in the vector autoregression literature. The results point to the informational content embedded in monetary aggregates, and suggest that monetary aggregates should be taken into account while evaluating monetary policy. Chapter 3: In assessing debt sustainability for advanced and emerging markets, the IMF’s Market Access Countries’ Debt Sustainability Analysis (MAC DSA) com- pares the levels of debt and gross financing needs (GFNs) against benchmarks sepa- rately derived from the noise-to-signal approach. In “Determinants of Sovereign Debt Crises,” I identify the main factors that contribute to sovereign debt crises. I take into account a broad range of debt distress drivers, including debt levels and gross fi- nancing needs, but also debt composition, macroeconomic fundamentals, and country characteristics such as whether the country is a small state or member of a currency union. By using the estimation results, I first derive an indicative cutoff probability of debt distress level. Then, I calculate the corresponding thresholds for debt variables, above which countries are predicted to experience an episode of debt distress
Thesis (PhD) — Boston College, 2018
Submitted to: Boston College. Graduate School of Arts and Sciences
Discipline: Economics
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Střecha, Michal. "Vývoj zahraniční zadluženosti veřejného sektoru zemí EU a jeho udržitelnost." Doctoral thesis, Vysoká škola ekonomická v Praze, 2012. http://www.nusl.cz/ntk/nusl-264279.
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The public debt is considered as an important indicator of the macroeconomic and financial stability of the domestic economy. It reflects a quality of the fiscal policy and the sustainability of the public finances. The public debt has been recently paid more attention in the context of the last financial and debt crisis initiated in 2008. A considerable amount of literature has been published on the topic of interconnections between budget balances and macroeconomic environment. However, the budget deficit is only a consequence of higher public expenditures than public revenues. Therefore, the debt is only an alternative source of financing the budget deficit. One of the main ideas of the doctoral thesis is that the macroeconomic effects of the fiscal policy represented by the budget deficits and effects of the public debt should differ. While activities of the fiscal policy effect the real economic indicators such as the GDP, an increase in the public debt effects the monetary indicators such as the exchange rate, the market interest rate and the money supply. The main object of the doctoral thesis is the analysis of the public debt development including the changes in the public debt structure broken down by debt instruments, currency, maturity and the holder profile. Besides, other main object is to analyse the macroeconomic effects of various forms of a public debt; firstly the attention is paid to different monetary effects of the domestic and the external public debt. The doctoral thesis suggests a new point of view to the analysis of the macroeconomic effects and sustainability of a public debt. The findings can be used in the decision making process; If a public deficit is supposed to be domestic debt or external debt financed. Apart from the effects of the changes in the outstanding debt, the effects of the changes in the public debt structure are examined.
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Navrátil, Jan. "Suverénní entity - financování, kreditní riziko a rating." Master's thesis, Vysoká škola ekonomická v Praze, 2015. http://www.nusl.cz/ntk/nusl-207035.
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The echoes of Eurozone debt crisis brought into question the sovereign risk of advanced economies. Understanding factors that influence this risk is key to avoid similar crisis of public debt financing in the future. The main aim of this thesis is to identify which factors influence sovereign entity financing and how the problems of public debt financing arise. This is reached through analysis of debt crisis development and its causes in the GIPS economies.
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Lopes, Denilson Torcate. "Função de reação da política fiscal e intolerância da dívida: o caso brasileiro no período pós-real." Universidade de São Paulo, 2007. http://www.teses.usp.br/teses/disponiveis/96/96131/tde-28012009-153452/.
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Análises sobre a sustentabilidade intertemporal da dívida pública nos países emergentes ganham cada vez mais importância no debate econômico internacional devido à sua importância na avaliação das políticas macroeconômicas desses países. Depois da reforma monetária de junho de 1994 que deu fim ao processo hiperinflacionário, a economia brasileira obteve como sub-produto a exposição de um grave desequilíbrio fiscal, em que a razão dívida/PIB passou a apresentar uma trajetória monotonicamente crescente, ultrapassando a marca de 50%, nível considerado extremante perigoso para um país emergente que se defronta com a intolerância da dívida. O presente estudo tem como objetivo estimar uma função de reação da política fiscal no Brasil para o período pós-Real, quantificando a relação entre o resultado primário do setor público consolidado, o comportamento da razão dívida/PIB, as instituições e a intolerância da dívida, bem como avaliar a ciclicidade da política fiscal no Brasil. Além disso, realiza-se um teste de raiz unitária com quebra endógena da razão dívida líquida/PIB descontada bem como testes de cointegração a fim de avaliar a hipótese de spend and tax da política fiscal brasileira no período em questão. Dentre as conclusões que foram extraídas deste estudo, destacam-se as evidências de que a política fiscal se comportou de maneira insustentável após a reforma de 1994, sendo marcado pela indisciplina fiscal, em que a receita foi a variável endógena do regime fiscal, caracterizado esse por um sistema spend and tax.Analyses of the sustainability of public debt across time in emerging countries are increasingly gaining in importance in the international economic debate, due to their importance for the evaluation of the macroeconomic policies of these countries. Following the June 1994 monetary reform that did away with hyperinflation, a major fiscal imbalance came to light in the Brazilian economy as a sub-product, with the debt/GDP ratio following a monotonically rising path and exceeding the 50% level. This is considered extremely dangerous for an emerging nation that is faced with debt intolerance. The aim of this study is to estimate a reaction function regarding Brazils fiscal policy for the post-Real period, quantifying the relation between the consolidated public sectors primary results, the behavior of the debt/GDP ratio, institutions and debt intolerance, as well as evaluating the cyclical aspects of fiscal policies in Brazil. Additionally, a unit root test was carried out, with endogenous breakdown of the discounted net debt/GDP ratio, as well as co-integration tests, in order to evaluate the spend and tax hypothesis of Brazilian fiscal policy during the period in question. One of the prominent conclusions of this study is that the fiscal policy behaved in a unsustainable manner after the 1994 reform, and underscored by fiscal indiscipline, with revenue being the endogenous variable of the fiscal regime, characterized by a spend and tax system.
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Pikhart, Zdeněk. "Fiskální politika a dluhové krize." Doctoral thesis, Vysoká škola ekonomická v Praze, 2015. http://www.nusl.cz/ntk/nusl-201568.
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Thesis deals with a fiscal policy issue with emphasis on the debt crisis. First specifics of the data capture of the government sector for the purpose of evaluating the fiscal position are analyzed. It includes assessment of the fiscal sustainability indicators and the historical reaction function of fiscal policy in the EU. The analysis of cyclical adjustment of the government balance, definition of fiscal impulse and the estimation of fiscal multipliers in the Czech Republic precedes the contribution to the debate regarding the optimal fiscal policy setup with respect to debt sustainability in the long run and sufficient degree of flexibility in the short run. The thesis concludes with the identification of the causes of the fiscal debt crises with the subsequent analysis of possible ways to resolve the already existing fiscal imbalances and assessing the appropriateness of the Czech government's consolidation.
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Mussons, Joan Maria. "Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case." Doctoral thesis, Universitat de Barcelona, 2018. http://hdl.handle.net/10803/663273.
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Concerns over sustainability and the cyclical pattern of public finances have been especially great since the onset of the global financial crisis. This thesis comprises four essays which aim to examine those concerns with regard to the Spanish Autonomous Communities (ACs).
The first paper analyses fiscal policy responsiveness of Spanish ACs over the cycle. We estimate fiscal reaction functions to analyze the response of ACs’ fiscal impulse and fiscal stance. On the one hand, an analysis of the change in the primary balance (the fiscal impulse) suggests counter-cyclicality over the period 1987-2008, but afterwards an a-cyclical impulse until 2012. Foral ACs stand out from other ACs, as their response is much more counter-cyclical. We do not find evidence regarding any asymmetric behaviour of ACs in good or bad periods. On the other hand, the response of ACs’ fiscal stance indicates that ACs’ discretionary fiscal behaviour has been pro-cyclical. This pro-cyclicality has sharpened since the last crisis, which is especially worrisome as health, education and social services expenditures are within regional responsibilities.
The second paper addresses the primary balance response to the debt of Spanish ACs from 1987 to 2015. Overall, the results of this study provide evidence of a nonlinear relationship between these variables, which points to a situation of fiscal fatigue and reduced fiscal space. The empirical framework builds mainly on the works of Bohn (1998) and Gosh et al. (2013), thereby also focusing on uncertainty issues. In 2015 the regional debt ratio stood at 26.8% of Gross Value Added, slightly above our lower estimate for the debt limit (24%) and well below the upper estimate (36%). A reduced fiscal space in ACs calls for measures to ensure a sustainable debt trajectory and regain some room to deal with potential negative shocks.
The third paper deals with personal income tax (PIT) revenue elasticities, which is the most important revenue source for Spanish ACs. We apply an error correction model to estimate PIT revenue elasticities in common regime ACs. The stability of these elasticities is checked and short-run asymmetries are identified. A tax overreaction is identified when PIT revenue is above the long-run equilibrium while a typical error correction model response is obtained when PIT revenue is below. Some simulations are provided to evaluate the dynamic adjustment between short and long-run elasticities and their consequences for fiscal pressure. Some findings regarding cross-sectional variability should also be noted: short and especially long-run elasticities present a decreasing pattern in respect to per capita income. Another noteworthy contribution is the analysis of forecasting performance in the presence of an endogeneity relationship. Despite the OLS estimator bias, its superiority is made clear (analytically and empirically) in comparison to the IV estimator.
The forth paper examines potential GDP and structural budget balances at regional level, following the methodology of the European Commission (EC). These are instruments used to guide economic policy, widespread at state level but much less at regional level. Measuring the cyclical position enables us to make an appraisal of the Catalan fiscal stance since 2004. In short, the fiscal policy of the Generalitat of Catalonia has been pro-cyclical, except for the first budgetary response to the crisis and the recovery period beginning in the second half of 2013. In years to come, the available fiscal space (in terms of debt) can condition the fiscal stance. This paper also points out the main limitations of the EC methodology. Finally, alternative estimates of Catalan potential GDP based on unobserved components models are presented, as well as an assessment based on their reliability and usefulness for inflation and GDP growth forecasting performance.
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Loureiro, Fátima Oliveira. "Gestão de tesouraria versus endividamento municipal." Master's thesis, Universidade Portucalense, 2015. http://hdl.handle.net/11328/1286.
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Dissertação de Mestrado em Finanças.Num período marcado pela sujeição à intervenção da TROIKA houve a necessidade de garantir o cumprimento das metas orçamentais. O controlo da execução orçamental e, em particular, do défice público, é um elemento crítico. O endividamento municipal é uma parte específica e fundamental desse controle. Esta dissertação assenta no estudo do impacto direto da gestão de tesouraria na proteção da liquidez e na redução do défice municipal no país, contribuindo para uma maior sustentabilidade. Neste estudo foi efetuada uma abordagem qualitativa, recorrendo à pesquisa bibliográfica e análise documental sobre a evolução histórica das autarquias, dos seus normativos legais, bem como dos principais conceitos aplicados à gestão financeira e ao défice orçamental dos municípios, acrescendo o estudo de casos. A pesquisa também integrou a recolha de dados baseada na consulta de sites institucionais. Embora aqueles estudos tenham incidido sobre o universo dos 308 municípios no período de 2010 a 2013, em alguns casos restringiu-se a uma amostra representativa. Foram analisadas as variáveis que influenciam a gestão de tesouraria dos municípios e o seu reflexo no endividamento. Observou-se que a liquidez de tesouraria representa um constrangimento para grande parte dos municípios portugueses e que uma gestão financeira de curto prazo não rigorosa contribui para incrementar o endividamento. Observou-se ainda que a prática duma eficiente gestão de tesouraria recorrendo a boas políticas de financiamento, de redução de tempos médios de pagamento e das dívidas a fornecedores, resulta na melhoria da liquidez e da capacidade de assumir e satisfazer compromissos, contribuindo para uma melhoria na situação municipal global. Conclui-se que o orçamento de tesouraria é um instrumento importante para a organização, contribuindo para evitar o descontrolo financeiro e do endividamento. Com base nisto, refletiu-se sobre um modelo de ação que o permita.
In a period marked by subjection to the intervention of TROIKA there was the need to ensure compliance with the budgetary targets. The budget monitoring and in particular the public deficit, is a critical element. The municipal debt is a specific and fundamental part of that control. This dissertation is based on the study of the direct impact of a cash management, protection of liquidity and reducing municipal deficit in the country, making it the most sustainable municipal management. In this study a qualitative approach was carried out through literature and document analysis on historical evolution of local authorities, their legal norms, as well as the main concepts applied to financial management and budget deficit of municipalities, including a case study. The documentary research has included a data collection through consultation of institutional sites. Although the case studies have focused on the universe of 308 municipalities in the 2010-2013 period, in some cases a representative sample was used. Variables that influence treasury management of the municipalities were used, as well as the way it impacts debt. It was observed that the liquidity of treasury represents a constraint for most Portuguese municipalities and that a non-rigorous short-term financial management helps to increase the debt. It was also observed that the practice in an efficient cash management through good practices in funding and reduction of average time for payment and debts to suppliers results in improved liquidity and ability to take over and meet commitments, contributing to an improvement the overall municipal situation. The conclusion is that the cash budget is an important tool that contributes to avoid uncontrolled financial and debt problems. Based on this, a reflection on a model that allows it took place.
Orientação: Prof. Doutor Fernando Oliveira Tavares.
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Ježek, Dominik. "Udržitelnost veřejnych financí v Řecku." Master's thesis, Vysoká škola ekonomická v Praze, 2014. http://www.nusl.cz/ntk/nusl-198457.
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In this work, I covered the sustainability of public finances in Greece, reachability of target values of debt to GDP ratio, analysis of impacts of the debt crisis in a political and social context, structure of the state budget and an evaluation of the implemented reforms. On the basis of technical publications, examples of debt crises in Asia and Latin America and recommendations from OECD, EC, NERV and IOBE I summarized the reform directions and steps to reach a sustainable state of public finances in Greece.
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Wahlström, Jonas, and Oscar Carlsson. "The relationship between CSR and the interest bearing cost of debt : An analysis of Nordic countries." Thesis, Umeå universitet, Företagsekonomi, 2020. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-173061.
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Corporate social responsibility (CSR), or perhaps the lack of it, is widely debated today. Regulations and international discussions surrounding the topic is taking up a larger room in the public domain with the Paris Climate Accords being a pinnacle where a number of countries decided to agree to quite ambitious climate goals. For companies, there could be incentives to early adapt to these accords to be better suited for the future. But even during present time, it could be beneficial to as early as possible readjust into a more sustainable direction. The Nordic countries are ranked among the top in the world when it comes to sustainability. Can this however, lead to a reduction in costs for Nordic companies that invest into CSR? The purpose of this study is to examine if there is a link between socially responsible companies and the cost of interest bearing debt. This was done by conducting a number of regression models, both linear and non-linear. The data used have a time frame of 10 years and span between 2009 to 2018 with a total number of 106 firm’s and 796 firm-year observations. CSR scores were collected using Thomson Reuters and the results show that there is a statistically significant negative relationship between CSR and the cost of interest bearing debt. The effects CSR have on the cost of interest bearing debt are somewhat inconsequential and the conclusion is made that CSR can be a major determinant for interest bearing debt, but it is related to the size of the debt portfolio. Further, the results of this research could be viewed as a component in a more comprehensive model.
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Guilherme, Marco Antonio Rocha Lima. "Programa de reestruturação e ajuste fiscal (PAF) : o caso do Espírito Santo no período 1998-2011." Universidade Federal do Espírito Santo, 2013. http://repositorio.ufes.br/handle/10/5977.
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Previous issue date: 2013-06-11A presente dissertação apresenta o conceito, as metas e os resultados efetivos do Programa de Reestruturação e Ajuste Fiscal dos Estados Brasileiros (PAF), assinado em 1998 após a instituição da Lei 9.496/97 e com previsão de duração até o ano de 2028, para os entes subnacionais e, em particular, para o Estado do Espírito Santo. Na primeira parte deste trabalho, relata-se breve histórico sobre a política fiscal no Brasil, evidenciando as causas que explicam a situação de endividamento dos entes subnacionais até a instituição da Lei 9.496/97, que promoveu a renegociação mais recente das dívidas estaduais. Na segunda parte, são efetivamente demonstradas às metas e os resultados obtidos pelos Estados brasileiros após o PAF entrar em vigor, no período de 1998 até 2011, objetivando avaliar quão eficaz é o PAF, sob o ponto de vista de promover o equilíbrio econômico-financeiro para os Estados e, principalmente, para o Espírito Santo, mais de treze anos após sua implementação. Finalmente, busca-se apontar importantes aspectos que necessitam de aperfeiçoamento e/ou modificação para que o Programa não se torne obsoleto e tenha resultados ainda mais eficientes
This paper presents the concept, the goals and the actual results of the Program for Restructuring and Fiscal Adjustment of Brazilian States (PAF), signed in 1998 after the enactment of Law 9.496/97 and expected to last until the year 2028, to the subnational units and, in particular, for the State of Espírito Santo. In the first part of this paper, it is reported brief history of fiscal policy in Brazil, highlighting the causes that explain the situation of indebtedness of subnational units to the institution of Law 9.496/97, which promoted the most recent renegotiation of state debts. In the second part, show up effectively the goals and the results obtained by the Brazilian states after PAF enters into force from 1998 to 2011, to evaluate how effective the PAF, from the point of view of promoting the economic-funding for states and especially to the Espírito Santo, more than thirteen years after its implementation. Finally, we try to point out important aspects that need improvement and/or modification to the program does not become obsolete and get results more efficient
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Ždárek, Václav. "Essays in debt sustainability, effects of institutional changes on fiscal policy in the Euro area and consumption responses to a shock in public salaries." Thesis, University of Warwick, 2017. http://wrap.warwick.ac.uk/91984/.
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The worst economic and financial crisis since the Great Depression in the 1930s, the Great Recession, followed by the Sovereign Debt Crisis (ESDC) in Euro area countries have revived interest in fiscal policy, and particularly in various topics related to its interactions with monetary policy in a monetary union. Despite a recent surge in theoretical and empirical work in this area, there are still many important questions that have not been explored and this thesis aims to fill this gap. This thesis consists of three essays. Chapter one and chapter two focus on particular sets of questions that partially address newly emerging problems in the wake of the ESDC. Their common link is the existence of the Euro area and problems of national fiscal policies in this monetary union. Chapter three analyses effects of a government intervention in the form of an unexpected public sector salary increase. The main focus of chapter one is on fiscal (debt) sustainability and the so-called fiscal fatigue hypothesis (`debt legacy'). For that purpose I firstly estimate a fiscal policy rule for Euro area countries, and test its robustness with various economic, financial and institutional determinants. Subsequently, the fiscal fatigue hypothesis is examined by estimating a non-linear specification of the same fiscal policy rule as suggested in the literature. In addition, I propose a simple linear debt rule for identifying the risk of fiscal fatigue. In chapter two I analyse the fiscal policy behaviour of `old' Euro area countries (EA-12) and three stand-alone EU countries (EU-3), given institutional constraints imposed on fiscal policy in the wake of the European integration process. To capture the changing nature of fiscal behaviour, I estimate a Bayesian time-varying parameter fiscal rule. Since fiscal harmonization is an important consequence of fiscal constraint, I also try to capture that effect by looking at the dispersion of country-specific Euro area fiscal behaviour and compare it with countries facing less strict fiscal constraints (EU-3). The last chapter aims to shed some light on a government intervention (a quasi-natural experiment) represented by an unexpected increase of public employees' salary. Given the type of intervention, I can construct a `natural' treated and a control group (private employees) and link them with data from a household budget survey. To compare their consumption behaviour, I estimate a regression model controlling for relevant economic and socio-demographic characteristics.
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Rose, Igor Barreto. "Limites endógenos da dívida pública brasileira." Universidade de São Paulo, 2018. http://www.teses.usp.br/teses/disponiveis/12/12138/tde-03122018-160724/.
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Como a sustentabilidade da dívida é afetada por elevados e crescentes níveis de endividamento no Brasil? Esta dissertação introduz uma estrutura teórica e empírica para a estimação de limites endógenos para a dívida bruta do setor público, utilizando um modelo com credores neutros ao risco que avaliam a probabilidade de calote do governo em função do próprio nível de endividamento e da taxa de juros e um governo soberano que segue uma função de reação do superávit ao nível da dívida com propriedade de fadiga fiscal e choques exógenos. Nos dados de 2002 a 2018, as estimativas de limites para o endividamento bruto estão entre 130,8%, no cenário mais provável, até 151,4% do PIB, sob condições mais favoráveis. As taxas de juros estariam entre 22% e 38% a.a., garantindo a sustentabilidade fiscal do governo para os próximos anos, com ressalvas que 1) este é um máximo para a dívida, nada é discutido sobre um nível ótimo de endividamento; e 2) que a trajetória crescente da dívida em anos recentes requer uma atenção especial por parte das autoridades fiscais que desejarem se comprometer com sua sustentabilidade, ainda que ela se situe abaixo de seu máximo.How the sustainability of public debt changes when rising indebtedness arises? This dissertation introduces the theoretical and empirical framework to estimate endogenous limits to the debt levels, that is, a model with risk-neutral lenders that account for the default probability as a function of indebtedness itself (thus the endogeneity) and the interest rates; and the fiscal authority, which follows a fiscal reaction function with the fiscal fatigue property and exogenous shocks. The estimates for the debt limits in the Brazilian economy stays around 130.8% and 151.4% of GDP, with real interest rates of 38% per year in the first case, using monthly data from 2002 to 2018. This ensures the fiscal sustainability for the next year, but it is worth noting that 1) this is the limit for debt levels; nothing is discussed about the optimal level for the economy as a whole; and 2) the path of rising indebtedness in the recent years needs to be strongly reviewed by whoever wishes to commit to fiscal sustainability in the next government.
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Hrušková, Karolína. "Financování rozpočtových deficitů v Eurozoně." Master's thesis, Vysoká škola ekonomická v Praze, 2015. http://www.nusl.cz/ntk/nusl-202056.
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This diploma thesis focuses on fiscal deficits in the Eurozone and possible consequences of their existence. The current state of public finances caused by insufficient fiscal responsibility of member states is discussed in the context of the debt and finance crisis, and related actions of the European Central Bank. The economic stability of the Eurozone is assessed in accordance with the theory of optimal currency areas. Using a monetary approach, the thesis presents circumstances that allow for a rise in inflationary pressures, also as a possible consequence of a debt monetization. The possible development of the indebtedness in the Eurozone and the critical points of public finance sustainability are discussed in the final part.
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Pasli, Mediha Agar. "Why Should Turkey Continue With Strong Fiscal Adjustment? Lessons Derived From The Past." Master's thesis, METU, 2006. http://etd.lib.metu.edu.tr/upload/12607851/index.pdf.
Full textAbstract:
WHY SHOULD TURKEY CONTINUE WITH STRONG FISCAL
ADJUSTEMENT?
LESSONS DERIVED FROM THE PAST
AgAR PASLI, Mediha
M.S., Department of Economics
Supervisor: Associate Prof. Dr. Nadir ÖCAL November 2006, 87 pages Turkey managed to produce a strong fiscal adjustment during the period of 1999-2005 with the annual average of close to 5 percent. Moreover, with the help of this tight fiscal stance, Turkey&rsquo
s public debt has been reduced from the peak of 90.5 percent of GNP in 2001 to 55.8 percent in 2005. Although this is a major achievement both in terms of the size and the speed, the challenge for Turkey is now to continue with fiscal adjustment in order to further reduce its public debt level which still poses a sizeable vulnerability risk for the economy. Therefore, in order to provide an answer to the sustainability question, this thesis first aims to (i) measure the fiscal adjustment in Turkey at the general government level during 1999-2005 period, (ii) analyze sources of fiscal adjustment based on the economic classification, institutional breakdown, and cyclical and structural components. After understanding size and sources of adjustment, the reduction in public debt will be decomposed into its parts including the contribution come from primary surplus. This will shed light on whether Turkey could still rely on those factors for further reduction in public debt in the future.
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Abbas, Syed Mohammad Ali. "From foreign aid to domestic debt : essays on government financing in developing economies." Thesis, University of Oxford, 2014. http://ora.ox.ac.uk/objects/uuid:95219b5a-4e24-4190-b5e3-95fb3d0b2425.
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The first essay [“Twin Deficits and Free Lunches: Macroeconomic Outcomes In Anticipation of Foreign Aid”] concerns itself with situations in which private agents anticipate a future windfall (free lunch) that will help service the debt resulting from a present fiscal expansion (implemented via a temporary tax cut). Such expectations of a windfall can arise in the context of natural resource discoveries or, more interestingly, due to perceptions by agents in “too important to fail” countries that will be bailed out through higher foreign aid or debt relief. We employ an overlapping generations model featuring credit constraints to study the real effects of such free lunch expectations in a small open economy, drawing contrasts with the standard tax and money finance closure rules. The model is solved analytically and shows that anticipated aid is equivalent to current aid when agents have perfect foresight, so that a temporary tax cut is seen as permanent. Accordingly, agents raise their consumption and indebtedness (at the expense of future generations) by an amount that is an increasing function of their “impatience” (subjective rates of time preference plus probability of death). A worsening of the current account obtains (twin deficits) across a range of plausible closure rules, including those featuring money finance. The introduction of credit constrained households (we study the variant where myopic agents spend their current disposable incomes) does not alter the basic result in the case of full aid finance, but does matter for mixed tax-aid regimes, in more complex settings where agent expectations and donor promises on aid diverge, and when governments face borrowing constraints so that the timing of aid delivery matters. The second essay [“The Role of Domestic Debt in Economic Growth: An Empirical Investigation For Developing Economies”] focuses on the remaining source of government financing, i.e. domestic debt, and the role it can play in mobilizing private savings, facilitating credit intermediation in higher risk settings (i.e. serving a “collateral” function on bank balance sheets), developing financial markets and supporting economic growth in general. To investigate this question empirically, we set up a new domestic debt database covering about 100 developing economies, going back three decades to 1975; explore Granger causality links between domestic debt and key macroeconomic and institutional variables; and estimate the growth impact of domestic debt using panel regressions, allowing for non-linear effects. Domestic debt, as a share of GDP is found to exert a significant positive impact on economic growth, with potential channels including domestic savings mobilization, provision of risk-insurance on banks’ balance sheets; and greater institutional accountability of the state to its citizens. Although this result countervails more established arguments against domestic debt (i.e. that it leads to crowding out and banks to become lazy), there is some evidence that above a ratio of 35 percent of bank deposits, domestic debt does begin to undermine economic growth. The growth payoff also depends on debt quality, with higher payoffs observed for positive interest-rate bearing marketable debt issued to nonbank sectors. The third and final essay [“Why Do Banks in Developing Economies Hold Domestic Government Securities?”] explores demand-side determinants of domestic debt, by focusing on commercial bank holdings of government paper, discriminating carefully between voluntary factors (such as mean-variance portfolio optimization) and statutory ones (cash reserve and capital adequacy requirements). The analysis is made possible by the construction of a dataset on government and private returns (real and nominal) for almost 600 banks from 70 emerging and low-income economies, spanning the (pre-Basel II) period 1995-2005. A battery of structural cross-section regressions indicates that banks’ portfolio decisions are at least as significantly influenced by mean-variance considerations as regulatory factors: the actual portfolio share of government securities (λ) responds intuitively, and sizably, to variations in the moments of the distributions for government and private returns as well as in the minimum-variance portfolio share (λ*). Higher cash reserve requirements tilt portfolios away from government securities toward riskier private lending, while higher capital adequacy requirements work the other way. The association between actual portfolios and the identified determinants is noticeably weaker at lower ends of the λ distribution, suggesting the domination of non-CAPM factors in those contexts.
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Filho, Antonio Carlos Passos. "O endividamento dos estados brasileiros: uma análise de sustentabilidade e dos instrumentos de controle." Universidade de São Paulo, 2018. http://www.teses.usp.br/teses/disponiveis/12/12138/tde-05122018-160150/.
Full textAbstract:
A Lei de Responsabilidade Fiscal (LRF) foi criada em 2000, tendo como um de seus objetivos o de controlar e limitar o processo de endividamento dos estados brasileiros. No entanto, em 2016, a União acertou o refinanciamento das dívidas de alguns destes estados. Este trabalho busca analisar esta aparente contradição; a crise dos estados teria como origem fatores exógenos à LRF ou os mecanismos da LRF não foram suficientes para conter o comportamento de endividamento excessivo dos estados? Utilizando a metodologia de Bohn (1998), estimou-se cinco modelos: painel completo, separação regional, separação por critério endógeno, separação por gasto com pessoal em relação a receita corrente líquida e separação pelo critério da Resolução de número 40 do Senado Federal. As estimações contemplam quatro períodos: 2001 a 2015; 2008 a 2015; 2001 a 2020 e 2008 a 2020, e consideram tanto a dívida consolidada líquida quanto a bruta. Os resultados apontam que os instrumentos que foram criados são ineficientes, pois estados que não estão constrangidos por nenhuma punição da LRF não possuem uma trajetória sustentável da dívida. Por consequência, é reforçada a ideia de que há um comportamento de risco moral por parte dos estados, que procuram endividar-se excessivamente por considerarem que a dívida será renegociada pela União, comportamento este que só pode ser combatido a partir de aprimoramentos institucionais.The \"Fiscal Responsibility Law\" (LRF) was created in 2000, having as one of its pillars the control of the regional states\' indebtedness process. However, in 2016, the federal government approved the refinance of such debts for some states. This paper seeks to analyze this seeming contradiction: the states\' crysis is due to factors that are exogenous to the LRF, or are the LRF mechanisms not sufficient to restrain the excessive indebtness by the states? Using Bohn\'s methodology (1998), five models are estimated: complete pannel, regional separation, separation by an endogenous criteria, separation by LRF\'s resolution to stafe workers expending (wages, pensions, etc) and separation by a Senate resolution\'s criteria. The estimations are made in four time frames: 2001-2015; 2008-2015; 2001-2020; 2008-2020, and both the net debt and the gross debt are considered. Results indicate that the instruments that were created by the LRF are inefficient, in the sense that states that are not punished or affected by said instruments do not follow a sustainable fiscal policy. Consequently, the idea of a moral hazard behaviour is reemforced: the states expect that the federal government will refinance its debt, so they do not follow a sustainable fiscal policy. This behaviour can only be stopped through institucional reforms.