fiscal deficit sustainability

", John Y. Campbell & Robert J. Shiller, 1986. is the debt-to-GDP ratio, institution, Login via your Although this state of affairs cannot persist forever, uncertainty arises about whether in the following period the government will choose to change its financing policy and about the form the change will take: an increase in the money supply ("monetization of the deficit") or an increase in taxes. • In addition to above, budget has also made provision for higher capital expenditure, with a clear indication towards positive outcome through sustainable development. ", Emmanouil Trachanas & Constantinos Katrakilidis, 2014. Solutions Manual to Macroeconomics of Self-Fulfilling Prophecies, Why deficits are sustainable and inflation has a life of its own, ← There are many unemployment rates for any r*. It also allows you to accept potential citations to this item that we are uncertain about. This can be possible through revenue augmentation and expenditure rationalization. January 2019. Recent projections developed by the UN Population Division estimate a 40 percent increase in world population and 7.8 years increase in the median age over the next 40 years. 0411005)". You can help correct errors and omissions. It also matter, a lot, who holds the debt. 212pp. • Budget has set the fiscal deficit target of 3.5% of GDP, with a plan for augmented capital expenditure. • Revenue deficit indicates that the government is unable to meet its current/revenue expenditure from its current/revenue receipts. Reliance on seigniorage to finance deficits is often quantitatively much more important, although its use varies widely across LDCs. ", Sheffrin, Steven M. & Woo, Wing Thye, 1990. Dans cette économie hypothétique, les recettes fiscales de l'Etat sont supposées être inférieures aux dépenses publiques. Typically, sustainability analyses for developing countries involve issues that are not particularly important in the industrial country context. See general information about how to correct material in RePEc. • Post-budget 2017-18, the Finance Minister set a committee under the leadership of N. K. Singh to appraise the FRBM act after a gap of 13 years. We aim to do this by reaching the maximum readership with works of the highest quality. This paper surveys the recent literature analysing fiscal deficit sustainability, most of which focuses on the U.S. and other industrial countries, in an attempt to assess its potential usefulness in the developing country context. the various RePEc services. The simultaneous presence of domestic and foreign debt, which characterizes a growing number of LDCs, are also discussed. {\displaystyle B_{t}} In the meantime, rising debt ratios would be associated with rising real rates of interest. Access supplemental materials and multimedia. 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A few key factors for creating stability through institutions which have been leveraged by EU member states are the following activities which the majority of fiscal councils have enacted: [17], The trend of demographic aging presents a major challenge to the industrialized world and an increasing number of developing countries. [14], There are numerous challenges and threats to the sustainability of public finance which can range from institutional challenges ranging from creating independent fiscal institutions, fiscal responsibility laws, fiscal rules and the management of fiscal risks to changing dynamics in the demographic structure of societies. Milton Friedman argued that inflation is caused by excessive money creation. We publish textbooks, journals, monographs, professional and reference works in print and online. PDF. /// En muchos países industriales los grandes y persistentes déficit fiscales del Estado, que elevan la deuda pública en proporción del producto nacional bruto (PNB) y de la riqueza privada total, están causando una preocupación considerable por sus posibles efectos nocivos sobre la masa de capital productivo. If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. is the primary balance (negative of primary deficit or government revenues minus government expenditures excluding interest expenditure). ", James D. Hamilton & Marjorie A. Flavin, 1985. Economists and policy analysts disagree about the impact of fiscal deficits on the economy. For terms and use, please refer to our Terms and Conditions (vol. Government budget deficits and trade deficits: are present value constraints satisfied in long-term data? • It indicates the total borrowing obligation to finance its deficit during a particular fiscal year and used to measure fiscal discipline and governs the long-term economic policy of a country. Si los inversionistas privados prevén que una posible terminación del financiamiento mediante bonos dará comienzo al financiamiento en dinero, lo que significaría una pérdida en el valor real de sus tenencias de bonos y de dinero, entonces lo más probable es que exijan compensación en forma de tipos de interés más altos. The size of the budget deficit and the ways of financing the deficit determine the fiscal constraints that the country will be subject to in the long term (Akçay, Alper and Özmucur, 2001:3). B Request Permissions. The Fiscal Sustainability Report 2015 provides an overview of the challenges to public finance sustainability faced by Member States. is the primary balance to GDP ratio. Fiscal Sustainability and Fiscal Focus: • Budget has set the fiscal deficit target of 3.5% of GDP, with a plan for augmented capital expenditure. https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/9706/9706001.pdf, https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/9706/9706001.html, https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/9706/9706001.ps.gz, Analysing the Sustainability of Fiscal Deficits in Developing Countries, Analyzing the sustainability of fiscal deficitsin developing countries.

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