A Guide to Public Debt Equations

Cafiso, Gianluca

doi:10.2139/ssrn.1975710

Cited by 8 publications

(3 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Gross National Product all in levels (Cafiso 2012b). From this point on when we write sustainability,…”

Section: Non-residents' Holdings and Sustainabilitymentioning

confidence: 99%

See 1 more Smart Citation

Debt Sustainability in the Case of External Debt. An Analysis Based on Italy's Treasury Auctions.

Cafiso

2014

SSRN Journal

Self Cite

View full text Add to dashboard Cite

The objective of this paper is to assess whether external debt makes a difference for public debt stabilization, where external debt is considered through the non-residents' holdings according to a Balance of Payments perspective. The analysis is empirical and considers the case of Italy, one of the world's largest debt issuer. We study the potential effects on the interest rate resulting from the auctions of government bonds to account for the effective cost borne by the Treasury. Our results point towards the irrelevance of the composition of the investor base for debt stabilization.

show abstract

“…Gross National Product all in levels (Cafiso 2012b). From this point on when we write sustainability,…”

Section: Non-residents' Holdings and Sustainabilitymentioning

confidence: 99%

“…where i h t is the interest rate on domestic-currency debt, i f t is the interest rate on foreign-currency debt, W t is the primary balance and S t is the stock-flow adjustment term (Cafiso 2012b). The interest rates in eq.…”

Section: Foreign Currency Versus Balance Of Paymentsmentioning

confidence: 99%

Debt Sustainability in the Case of External Debt. An Analysis Based on Italy's Treasury Auctions.

Cafiso

2014

SSRN Journal

Self Cite

View full text Add to dashboard Cite

show abstract

“…With regard to so‐called “sudden stops,” we mention also the potentially harmful sovereign–bank link. We explain their potential effect on debt sustainability through the formula of the debt‐stabilizing primary balance:

\underset{p b_{t}}{\underset{}{\underset{︸}{\frac{T_{t}}{Y_{t}} - \frac{E_{t}}{Y_{t}}}}} = true(i_{t} - g_{t} true) \cdot \underset{d_{t - 1}}{\underset{}{\underset{︸}{\frac{D_{t - 1}}{Y_{t - 1}}}}},

where pb is the primary balance/GNP (gross national product) ratio, i is the interest rate on the outstanding debt stock, g is the growth rate of the economy; T , E , D and Y are tax revenues, expenditures, debt and gross national product all in levels (Cafiso, ). From this point on, when we refer to sustainability, we mean stabilization as implied by equation ; the higher the primary balance needed to stabilize the debt‐to‐GNP ratio, the less sustainable public debt becomes…”

Section: Debt Sustainability and Nrhmentioning

confidence: 99%

Non‐residents’ Holdings, Market Volatility and Public Debt Sustainability. An Analysis with Data for Italy

Cafiso

2016

Rev International Economics

Self Cite

View full text Add to dashboard Cite

Non-residents' holdings (NRH) of debt securities have been large in euro area countries, but during the euro area debt crisis some of those countries experienced a steep contraction of such holdings. The analysis aims to provide a data-founded explanation of what is behind the decrease observed in 2011 by testing two alternative hypotheses. At the same time, we discuss how that decrease might have endangered the sustainability of public debt and study the empirical relevance of the most important of those processes. The topics presented refer to any advanced economy, but we check the hypotheses discussed by taking Italy as a case study because of data constraints. Italy is an interesting country to consider since it is a very large debt issuer. Our results point towards the importance of market volatility to explain variations of NRH, but those holdings do not seem to influence debt sustainability.Non-residents' holdings of public debt within the EA have been favored by the introduction of the common currency in 1999 (Lane, 2006), which boosted demand for NON-RESIDENTS' HOLDINGS AND PUBLIC DEBT 485

show abstract

Fiscal Consolidation in Romania in the Wake of the COVID-19 Pandemic: How Much and How Fast?

Dumitrescu

Hândoreanu

2022

Digitalization and Big Data for Resilience and Economic Intelligence

View full text Add to dashboard Cite

A Guide to Public Debt Equations

Cited by 8 publications

References 4 publications

Debt Sustainability in the Case of External Debt. An Analysis Based on Italy's Treasury Auctions.

Debt Sustainability in the Case of External Debt. An Analysis Based on Italy's Treasury Auctions.

Non‐residents’ Holdings, Market Volatility and Public Debt Sustainability. An Analysis with Data for Italy

Fiscal Consolidation in Romania in the Wake of the COVID-19 Pandemic: How Much and How Fast?

Contact Info

Product

Resources

About