Macroeconomic -stabilization and structural -adjustment programs for debt – ridden developing countries generally center on two major policies: reduction of the fisc l deficit as the expenditure-reducing policy and deval-uation of the domestic currency as the expenditure -switching policy. Thisstudy discusses and quantifies the conditions under which those policies are consistent for countries such as…
This paper presents and analyzes an endogenous growth model with public cap-ital and public debt. It is assumed that the ratio of the primary surplus to grossdomestic income is a positive linear function of the debt income ratio which assuresthat public debt is sustainable. The paper then derives necessary conditions for theexistence of a sustainable…
Excessive borrowing by subnational governments is considered to be one of the perils of fiscal decentralization. On the other hand, fiscal decentralization might ensure the fiscal stability of the public sector by constraining Leviathan governments. Since the impact of decentralized government on fiscal outcomes is therefore ambiguous from a theoretical perspective, we explore this question…
This paper introduces the first truly comprehensive database on gross government-debt-to-GDP ratios, covering nearly the entire IMF membership (178 countries) and spanning an exceptionally long time period (going back to 1880 for most advanced and some emerging economies). The paper then uses the database to document the evolution of public debt ratios in advanced, emerging,…
