1 WP/14/34 Debt and Growth: Is There a Magic Threshold? Andrea Pescatori, Damiano Sandri, and John Simon
2 2 214 International Monetary Fund WP/14/34 IMF Working Paper Research Department Debt and Growth: Is There a Magic Threshold? 1 Andrea Pescatori, Damiano Sandri, and John Simon 2 Authorized for distribution by Thomas Helbling February 214 This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Abstract Using a novel empirical approach and an extensive dataset developed by the Fiscal Affairs Department of the IMF, we find no evidence of any particular debt threshold above which medium-term growth prospects are dramatically compromised. Furthermore, we find the debt trajectory can be as important as the debt level in understanding future growth prospects, since countries with high but declining debt appear to grow equally as fast as countries with lower debt. Notwithstanding this, we find some evidence that higher debt is associated with a higher degree of output volatility. JEL Classification Numbers: H63, O4 Keywords: Sovereign debt, growth Author s Address: 1 This working paper is based on, but expands upon, work originally contained in Chapter 3 of the October 212 World Economic Outlook. 2 Research Department, International Monetary Fund.
3 3 Contents Page I. Introduction... 4 II. Literature Review and Background... 5 III. Data and Methodology... 6 IV. Empirical Results... 7 V. Robustness Checks VI. Debt and Volatility VII. Conclusions VIII. Data Appendix References Figures 1. Debt and Growth in the Short Run Debt and Growth over the Medium Run Debt Dynamics over the Medium Term Debt and Growth Depend on the Debt Trajectory Relative Growth Performance Growth Performance from 5 to 15 Years after Crossing Debt Thresholds GDP Volatility during the 15 Years after Crossing Debt Thresholds... 14
4 4 I. INTRODUCTION Is there a particular threshold in the level government debt above which the medium-term growth prospects are dramatically compromised? The answer to this question is of critical importance given the historically high level of public debt in most advanced economies. Yet there is currently no agreement on the answer and it is the subject of heated academic and political debate. One camp has argued that high levels of debt are associated with particularly large negative effects on growth. For example, an influential series of papers by Reinhart and Rogoff (21, 212) argues that there is a threshold effect whereby debt above 9 percent of GDP is associated with dramatically worse growth outcomes. An opposing perspective is advanced by those who dispute the notion that there is a clear debt threshold above which debt sharply reduces growth and raise endogeneity concerns whereby weak growth is the cause of particularly high levels of debt. Thus, according to this view, the priority should be increasing growth rather than reducing debt and, consequently, that much less short-term fiscal austerity is appropriate. This paper makes a contribution to the debate by presenting new empirical evidence based on a different way of analyzing the data and a sizeable dataset. Our methodology is based on the analysis of the relation between debt and growth over longer periods of time that has the potential to attenuate the concerns of reverse causality from growth to debt. Our results do not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised. On the contrary, the association between debt and medium-term growth becomes rather weak at high levels of debt, especially when controlling for the average growth performance of country peers. We also find evidence that the debt trajectory can be just as important, and possibly more important, than the level of debt in understanding future growth prospects. Indeed, countries with high but declining levels of debt have historically grown just as fast as their peers. We also find, however, that high levels of debt are weakly associated with higher output volatility. This suggests that high levels of debt may still be associated with market pressure or fiscal and monetary policy actions that, even if they do not have particularly large negative effects on medium-term growth, destabilize it. As with previous empirical studies, however, caution should be used in the interpretation of our empirical results. While our methodology may attenuate problems of reverse causality from growth to debt, our methodology is still unable to formally establish a firm causality. The remainder of this paper discusses the existing literature in more depth before presenting our analytical approach and empirical results. We then offer some short conclusions.
5 5 II. LITERATURE REVIEW AND BACKGROUND The debate about the relation between debt and growth has been animated by a growing series of empirical papers. One of the most influential analyses on the topic is the one of Reinhart and Rogoff (21) (henceforth R&R). The key claim of the paper is that there is a particular threshold effect such that countries having debt above 9 percent of GDP have a growth performance dramatically lower than others. While the findings of R&R (21) have been recently challenged by Herdon, Ash, and Pollin (213), which show that the threshold effect seems to vanish after correcting for a coding error and using a different weighting of the data, the debate is still very much open. Kumar and Woo (21), for example, claim to have found some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. 3 Similarly, Cecchetti et al (211) find that beyond 96 percent of GDP, public debt becomes a drag on growth leading them to conclude that countries with high debt must act quickly and decisively to address their fiscal problems. 4 Focusing on the Euro Area alone, Baum, Checherita and Rother (213) also find that debt has a non-linear effect on growth, leading to lower growth when it exceeds 95 percent. In addition to the threshold effect there is the issue of causality: high debt may be the result of sluggish growth or it could reflect a third factor, an omitted variable, that simultaneously increases debt and reduces growth. Obvious examples are wars or financial crises. This concern is particularly relevant when considering the short-term correlation between growth and debt, which has been the focus of segments of the literature, since temporary recessions naturally lead to an immediate increase in the debt ratio. To partially address this issue, R&R (212) have complemented their analysis of the relation between debt and growth by considering prolonged periods of high debt. Their results suggest that, during periods of debt overhangs, growth tends to be considerably lower. Other papers have tackled the issue of causality by using on instrumental techniques. Among these, Panizza and Presbitero (212) reject the hypothesis that high debt causes lower growth. Once they instrument debt with a variable that captures valuation effects brought about by the interaction between foreign currency debt and exchange rate volatility, they find no effect 3 Kumar and Woo (21) runs a growth regression at 5 year frequency from 197 to 27 and find that a 1 percentage point increase in the initial debt-to-gdp ratio is associated with a slowdown in annual real per capita GDP growth of.15 percentage points per year in AEs. They test for nonlinearities by introducing 3 interaction terms between initial debt and dummy variables for three ranges of initial debt, 3, 6, and 9, respectively. 4 Cecchetti et al (211) using data on 18 OECD countries from 198 to 21 find that a 1 percent increase in government debt reduces real per capita GDP growth by.17 percent per year. To evaluate the presence of threshold, they introduce two dummies, above and below a generic threshold,, in the growth equation. They find that the 96 percent threshold minimizes the sum of squared residuals conditional on no crisis.
6 6 of debt on growth. Finally, the existence of a threshold bears on the question of causality. If low growth causes high debt it is less likely that one would observe a distinct threshold in the debt and growth relationship. Thus, if such a threshold exists, it is much more likely to be driven by a causal effect of debt on growth. III. DATA AND METHODOLOGY The IMF Fiscal Affairs Department recently compiled a comprehensive database on gross government debt to GDP ratios covering nearly the entire IMF membership back to The use of gross debt data reflects the difficulty of collecting net debt data on a consistent basis across countries and over time. Nonetheless, even gross debt data may not be immune to measurement issues (see Dippelsman and others 212). We augment this data with supplementary data on interest payments and primary deficits for 19 advanced economies from Abbas and others (211) as well as real GDP data from Maddison (23) and other data from R&R (21) (see Data Appendix for further details). Reflecting the availability and coverage of the supplementary data, we focus on the advanced economies in this paper. The average debt-to-gdp level in the sample is 55 percent while the average real output per capita growth rate is 2¼ percent. Given that the sample encompasses two world wars and the Great Depression, there are numerous outliers. Differently from the analysis by R&R (21), and closer in spirit to a growth regression, we focus on the long-term relationship between today s stock of debt over GDP, b t, and GDP growth in the next h -years g ( h) y / y. By taking a longer-term perspective we try to it t h t mitigate the reverse causality effects that temporary recessions or bursts of growth can have on the debt-to-gdp ratio in the short run. We start with a sample of all advanced economy episodes where gross public debt rose above a threshold. 6 We then look at the real GDP growth per capita over the following h years, where h [1,5,1,15]. We allow countries to have multiple, but not overlapping, episodes i.e., a new episode cannot begin earlier than h years after the previous one begins. More precisely, for a country i and a given threshold, the beginning of an episode has to satisfy following conditions 5 See Abbas and others (21) for a detailed description of the database which is available online on 6 The starting date of a raising (declining) debt episode is the first year in which the debt-to-gdp ratio exceeds x percent, conditional on the ratio being below (above) x percent in the previous year. In a few instances, missing data prevent us from identifying the exact year in which the debt-to-gdp ratio crossed the x percent threshold. In these cases, we interpolate the data linearly and date the episode when the interpolated data shows the x percent threshold is crossed. Furthermore, given our focus on the 15 years after the threshold is crossed, we only consider episodes that begin by 1997 and, thus, end by 212. We have experimented with different windows (e.g., 1 years and 2 years) and the results are essentially unchanged
7 7 b it, bit 1 and j [1,..., h] s.t. bit j, bit j 1. A similar methodology has been followed by R&R (212) who have traced the growth performance of countries during periods with debt above 9 percent of GDP. Our approach, however, differs from theirs along two important aspects. First, we consider a broad range of debt thresholds, not just 9 percent. Second, instead of considering only the period when debt remains above a certain level, we analyze the growth performance of the episodes over a given period of time regardless of the debt outcome. The advantage of this approach is that it avoids a particular truncation problem that arises when the end of an episode is defined based on the level of debt. Focusing on outcomes when debt is above a certain threshold implies selecting failures. In our case, we include countries that successfully reduce debt after rising above a given threshold as well as the failures that are included in studies that only look at time periods when debt is above a certain threshold. Before discussing the analytical results, we also note two important features of our methodology. First, by ruling out overlapping episodes and requiring that each episode begins with debt crossing a given threshold from below, each country is allowed to have only a relatively small number of episodes. These episodes are pooled together and weighted equally when computing averages. The approach followed by R&R (21), based on the contemporaneous association between debt and growth, led to some countries having a vastly higher number of observations than others. Different weighting of these observations can potentially lead to significantly different conclusions as pointed out by Herdon, Ash, and Pollin (213). Second, relative to the growth regressions used in some papers, our approach has the flexibility of not imposing a linear (or some arbitrary polynomial) relation between debt and growth. IV. EMPIRICAL RESULTS We begin the empirical analysis by focusing on the short run association between debt and growth, similarly to the approach followed by R&R (21). Figure 1 shows the average real GDP growth rate per capita in the year after the debt-to-gdp ratio crosses a given threshold, that is, where h 1. 7 Consistent with R&R (21), we observe that GDP growth is particularly low in the year after the debt-to-gdp ratio reaches levels above 9 percent. Indeed, this chart shows that GDP growth averages around 2 percent in countries with debt below 9 percent, and tumbles to about -2 percent in countries whose debt ratio increases above that level. At the same time, the inter-quartile range across all episodes reveals that the growth performance for countries with debt rising above 9 percent is quite diverse. 7 To maintain consistency in the sample when we look at longer time-horizons below, the exclusion window for episodes is based upon h=15. This does not affect the finding of a dramatic deterioration in growth performance above the 9 percent threshold seen in Figure 1.
8 Real GDP growth per capita 8 Figure 1: Debt and Growth in the Short Run Interquartile range 1 year -8-1 It would be unwise, however, to look for a causal relation between debt and growth from Figure 1 because of the possibility of reverse causation mentioned above. While it is possible that when the debt-to-gdp ratio exceeds 9 percent countries enter a state of distress that leads to a substantial reduction in growth, it is equally possible that increases in public debt above 9 percent are driven by an omitted variable that reduces GDP and tax revenues that, in turn, leads to higher debt. Furthermore, as suggested by the wide inter-quartile range, these results are relatively fragile and unduly influenced by outliers. For example, the debt-to-gdp ratio in Japan increases from 133 percent in 1943 to 24 percent in 1944, and the subsequent growth rate in 1945 was -5%. This observation alone leads to a considerable reduction in the average growth for debt thresholds above 135 percent of GDP. Extending the horizon of analysis allows us to mitigate the bias in the analysis induced by reverse causality and potential omitted variables issues it also attenuates the effects of outliers such as the growth observation for Japan in For example, automatic stabilizers mean that low growth will tend to have an effect on the primary balance, and, thus, on debt over a short-term horizon. Similarly, and even more mechanically, a recession will raise the debt to GDP ratio because the denominator decreases. If high debt (that is, debt above some threshold) operates as a drag on growth over anything but the short-run, however, we would expect to observe weak growth not only in the year after the debt ratio exceeds the threshold, but also during the subsequent years. In Figure 2, we show the growth performance of the same episodes over longer horizons of h 5,1,15. Relative to the previous case of h 1, the growth performance improves
9 Real GDP growth per capita 9 considerably even at a 5-year horizon. 8 The improvement is particularly noticeable for horizons of 1 and 15 years. Importantly, while higher debt is still associated with milder growth, there is no longer any clear debt-to-gdp threshold above which growth deteriorates sharply. Figure 2: Debt and Growth over the Medium Run year interquartile range 15 years 1 years 5 years 1 year In Figure 3, we analyze the possibility that the weakening relation between growth and debt over longer periods of time could reflect the fact that the debt-to-gdp ratio falls sharply after exceeding high thresholds. Figure 3 reveals that this is not the case. For any given debt threshold on the horizontal axis, the chart shows the average debt-to-gdp ratio during the 1, 5, 1, and 15 subsequent years. We observe that, while there is some tendency for the debt ratio to shrink when it reaches particularly high levels, the process is extremely slow. For example, countries that exceed the 14 percent debt thresholds experience an average debt ratio during the subsequent 15 years of 13 percent. 8 The sample of episodes is identical in each case as we maintain an exclusion window for new episodes of 15 years for all horizons.
10 Average debt-to-gdp 1 Figure 3: Debt Dynamics over the Medium Term year interquartile range 15 year 1 year 5 year 1 year 45-degree line So far we have considered only those episodes where the debt-to-gdp ratio increases above a given threshold. But what about countries that have a high, but falling, debt ratio? To investigate this we identify all episodes whose debt ratio falls below a certain level, that is: b it, bit 1 and j [1,..., h] s.t. bit j, bit j 1. Figure 4 compares the growth performance of these episodes with the previous ones. The left chart shows that the sharp reduction in growth that we observed in countries whose debt increases above 9 percent is no longer present for countries that have high debt on a declining path even at a 1-year horizon. In fact, even countries with debt ratios of percent but on a declining path have experienced solid growth. This observation suggests that the high debt itself is not causing the low growth in these episodes but other factors, associated with increasing debt, are more strongly implicated. Furthermore, even though we have abstracted from the short-term reverse causality issues by extending the horizon, as shown on the right hand side of Figure 4 the initial debt trajectory remains important even after 15 years. That is, the trajectory of debt appears to be an important predictor of subsequent growth, buttressing the idea that the level of debt alone is an inadequate predictor of future growth.
11 Real GDP growth per capita Real GDP growth per capita 11 Figure 4: Debt and Growth Depend on the Debt Trajectory year, debt going up 15 year, debt going down year, debt going up 1 year, debt going down 1-6 V. ROBUSTNESS CHECKS The episodes we consider occur throughout the 2 th century. Over this time, average growth varied substantially, from lows during the Great Depression to highs during the 195s. Thus, it is possible that our results are being distorted, for example, by the generally high growth rates experienced by all countries in the immediate post-wwii period. To control for this possibility, we compare the average growth rate during an episode with the simple average of 1 growth rates for all economies over the same period: g t ( h) yit h / y. For each it N episode we look at g ( h) g ( h) rather than the simple growth rate. it t Figure 5 replicates the right hand side chart of Figure 4 when we use this measure of relative growth rather than absolute growth for each episode. What we find is that, generally speaking, the growth performance of countries with high debt is fairly close to that of their peers differences are less than ½ percent per year except at the lowest debt levels. Furthermore, we observe that the country s debt trajectory still matters. Among countries with the same debt levels, the growth performance over the next 15 years in countries where debt is decreasing is better than that in countries where it is increasing. This difference is statistically significant across the whole sample. It is particularly striking for debt levels between 9 and 115 percent of GDP (where average growth is ½ a percentage point higher). 9 Furthermore, there is no unique threshold that is consistently followed by a subpar growth performance. In fact, Figure 3.5, panel 2 shows that countries with a debt level between 9 and 11 percent outperform the control group when debt is on a declining trajectory. i 9 Countries with very low debt levels (e.g., below 25 percent of GDP) tend to have higher public debt levels after 15 years. In such cases, whether debt is increasing or decreasing at the time they cross the threshold has much less of an effect on the level of debt at the end of the episode.
12 Real GDP growth per capita (deviation from advanced economy average) 12 Figure 5: Relative Growth Performance year, debt going up 15 year, debt going down As an additional robustness check, Figure 6 considers the growth performance from 5 to 15 years after crossing a given debt-to-gdp threshold. In so doing, we remove from the analysis the first five years of each episode that could be significantly influenced by the channels of reverse causality from growth to debt mentioned earlier. 1 The left chart shows the average growth rates in absolute terms, git, t 5(1) yt 15 / yt 5, while the right chart considers the growth rates relative to average growth rate in advanced economies, git, t 5 (1) gtt, 5(1). Both charts show that with the removal of the first 5 years the relation between growth and debt becomes even flatter. Furthermore, we observe that even the direction of debt is no longer a clear predictor of growth, as can be seen from the various overlaps in average growth in the right-hand side chart. 1 While there is some correlation between growth one year and the next, in our sample there is none at a horizon of five years. In particular, a regression of growth at t+5 on growth a t finds a coefficient that is both statistically and economically insignificant. Thus, by excluding the first five years we are removing the effects of automatic stabilizers and serial correlation mentioned earlier that may tend to induce spurious correlations between debt and growth over short horizons.
13 Real GDP growth per capita Real GDP growth per capita (deviation from advanced economy average) 13 Figure 6: Growth Performance from 5 to 15 Years after Crossing Debt Thresholds to-15 year, debt going up 5-to-15 year, debt going down to-15 year, debt going up 5-to-15 year, debt going down VI. DEBT AND VOLATILITY The previous empirical analysis suggests that high levels of debt are not, of themselves, necessarily associated with subpar growth over the medium term. However, it is possible that high levels of public debt may have implications for the volatility of GDP. For example, high levels of debt can induce fiscal and monetary policy reactions that increase output volatility, such as large front-loaded fiscal consolidation or temporary bursts of inflation. To shed some light on this issue, we apply our methodology to the relation between debt and GDP volatility (Figure 7). More precisely, given the episodes previously identified, we calculate the output volatility over those episodes in deviation from the average output volatility: it ( h) t ( h) h 1 h 1 1/2 it it j while it k t ( h) j k where ( h) [ ( g (1) g (1) / h)] deviation of advanced economies GDP growth over the same period. 11 is simply the average standard 11 Given the well established stylized fact that volatility has been trending down (see Blanchard and Simon 21 or McConnell and Perez-Quiros 2) the presence of a control group is more necessary than with growth rates.
14 Standard Deviation of Real GDP growth per capita (difference from advanced economy average) Standard Deviation of Real GDP growth per capita (difference from advanced economy average) 14 Figure 7: GDP Volatility during the 15 Years after Crossing Debt Thresholds Interquartile range 15 year, debt going down -3-4 Interquartile range 15 year, debt going up As in the case of output growth, we find no particular debt threshold above which output volatility jumps. However, notwithstanding the large inter-quartile range, there is a suggestion of a positive relation between debt and output volatility. In particular, when debt increases above the sample mean (56 percent), countries tend to experience a relatively higher volatility. 12 Note that the relation between debt and output volatility should be less affected by reverse causality since it is not obvious how an increase in output volatility has a mean effect on debt. VII. CONCLUSIONS Our analysis of historical data has highlighted that there is no simple threshold for debt ratios above which medium-term growth prospects are severely undermined. On the contrary, the association between debt and growth at high levels of debt becomes rather weak when one focuses on any but the shortest-term relationship, especially when controlling for the average growth performance of country peers. Furthermore, we find evidence that the relation between the level of debt and growth is importantly influenced by the trajectory of debt: countries with high but declining levels of debt have historically grown just as fast as their peers. The fact that there is no clear debt threshold that severely impairs medium term growth should not, however, be interpreted as a conclusion that debt does not matter. For example, we have found some evidence that higher debt appears to be associated with more volatile growth. And volatile growth can still be damaging to economic welfare. As in previous empirical studies, our analysis is still subject to potential endogeneity concerns that should caution against drawing strong policy implications. However, by mitigating the short-term and mechanical reverse causality problems whereby low growth 12 The small resurgence of volatility observed for debt falling at very low levels (below 2 percent, see left chart in Figure 7) might be related to reduction of debt occurred with hyper-inflation or default.
15 15 leads to higher debt, we show that the prima facie case for debt thresholds is substantially weakened. We find no evidence of threshold effects over any but the shortest-term horizons. Furthermore, the remaining relationship between debt and growth is relatively muted and the magnitude is much smaller than the dramatic figures suggested in earlier studies. Notwithstanding this, because of residual issues that confound the interpretation of the medium-term relationship between debt and growth, we emphasize that this does not establish what the underlying structural relationship is. That must wait for more sophisticated work that can properly address the complex identification issues that characterized this area of research.
16 16 VIII. DATA APPENDIX Data are mainly based on the IMF Fiscal Affairs Department database on gross government debt to GDP ratios that covers nearly the entire IMF membership back to We also use supplementary data on interest payments and primary deficits for 19 advanced economies from Abbas and others (211) as well as real GDP data from Maddison (23) and other data from Reinhart and Rogoff (21). The list of countries is given in Table 1. In few instances, mainly at times of war, we linearly interpolated internal missing values for GDP and debt to GDP ratio. Table 1: Database coverage Real per capita GDP Debt/GDP Start End Start End Australia Austria Belgium Canada China,P.R.:Hong Kong Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Iceland Ireland Israel Italy Japan Korea, Republic of Luxembourg Malta Netherlands New Zealand Norway See Abbas and others (21) for a detailed description of the database which is available online on
17 17 Portugal Singapore Slovak Republic Slovenia Spain Sweden Switzerland Taiwan Prov.of China United Kingdom United States
18 18 REFERENCES Abbas, S. M. Ali, Nazim Belhocine, Asmaa A. ElGanainy and Mark A. Horton, 21, A Historical Public Debt Database, IMF Working Paper No. 1/245., 211, Historical Patterns and Dynamics of Public Debt Evidence from a New Database, IMF Economic Review, Vol.59, No.4, pp Baum, Anja, Cristina Checherita and Philipp Rother, 213, Debt and Growth: New Evidence from the Euro Area, Journal of International Money and Finance, Vol. 32, pp Blanchard, Olivier, and John Simon, 21, The Long and Large Decline in U.S. Output Volatility, Brookings Papers on Economic Activity, No. 1, Vol. 21, pp Cecchetti, S. G., Mohanty, M.S., and F. Zampolli, 211, The Real Effects of Debt, Federal Reserve Bank of Kansas City, Economic Symposium 211: Achieving Maximum Long-Run Growth, pp Dippelsman, Robert, Claudia Dziobek, and Carlos A. Gutiérrez Mangas, 212, What Lies Beneath: The Statistical Definition of Public Sector Debt, IMF Staff Discussion Note No. 12/9. Herndon, Thomas, Michael Ash, and Robert Pollin, 213, Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff, Political Economy Research Institute, Working Paper No International Monetary Fund, 212, The Good, the Bad, and the Ugly: 1 Years of Dealing with Public Debt Overhangs, World Economic Outlook, Chapter 3 (Washington, DC). Kumar, Manmohan, and Jaejoon Woo, 21, Public Debt and Growth, IMF Working Paper No. 1/174, July (International Monetary Fund: Washington, DC). Maddison, Angus, 23, The World Economy: Historical Statistics (Paris: Organization for Economic Cooperation and Development). McConnell, M. and G. Perez-Quiros, 2, Output Fluctuations in the United States: What Has Changed Since the Early 198s? The American Economic Review, Vol. 9, No. 5, pp
19 19 Panizza, Ugo and Andrea F. Presbitero, 212, "Public Debt and Economic Growth: Is There a Causal Effect?", MoFiR Working Paper No. 65. Reinhart, Carmen M. and Kenneth S. Rogoff, 21, Growth in a Time of Debt, American Economic Review: Papers & Proceedings, Vol. 1, No. 2, pp Reinhart, Carmen M., Vincent R. Reinhart, and Kenneth S. Rogoff, 212, Public Debt Overhangs: Advanced-Economy Episodes since 18, Journal of Economic Perspectives, Vol. 26, No. 3, pp
J. F. Kennedy sq. 6 10000 Zagreb, Croatia Tel +385(0)1 238 3333 http://www.efzg.hr/wps firstname.lastname@example.org WORKING PAPER SERIES Paper No. 14-09 Josip Tica Vladimir Arčabić Junsoo Lee Robert J. Sonora On the Causal
DEBT LEVELS AND FISCAL FRAMEWORKS Christian Kastrop Director of Policy Studies Branch Economics Department Introduction OECD average gross government debt increased from 73% of GDP in 2007 to 111% in 2013.
Please cite this paper as: OECD (1), Fiscal Consolidation: How Much is Needed to Reduce Debt to a Prudent Level?, OECD Economics Department Policy Notes, No. 11, April. ECONOMICS DEPARTMENT POLICY NOTE
Effects of Capital Inflows on Economies An essay by Jay Pocklington 6/2/2011 While there is no proof in the data that financial globalization has benefited growth, there is evidence that some countries
General Government debt: a quick way to improve comparability DEMBIERMONT Christian* BIS Bank for International Settlements, Basel, Switzerland Christian.Dembiermont@bis.org In simple words the General
PUBLIC DEBT SIZE, COST AND LONG-TERM SUSTAINABILITY: PORTUGAL VS. EURO AREA PEERS 1. Introduction This note discusses the strength of government finances in, and its relative position with respect to other
NBER WORKING PAPER SERIES LONG-TERM DAMAGE FROM THE GREAT RECESSION IN OECD COUNTRIES Laurence M. Ball Working Paper 20185 http://www.nber.org/papers/w20185 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts
Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff Thomas Herndon Michael Ash Robert Pollin April 15, 2013 JEL codes: E60, E62, E65 Abstract We replicate Reinhart
Does euro area membership affect the relation between GDP growth and public debt? Christian Dreger Hans-Eggert Reimers European University Viadrina Frankfurt (Oder) Department of Business Administration
Fiscal sustainability, long-term interest rates and debt management Fabrizio Zampolli Bank for International Settlements Basel A presentation at the Dubrovnik Economic Conference 13-14 June 2013 The opinions
American Economic Review: Papers & Proceedings 100 (May 2010): 573 578 http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.2.573 Growth in a Time of Debt By Carmen M. Reinhart and Kenneth S. Rogoff*
Gini Coefficient The Gini Coefficient is a measure of income inequality which is based on data relating to household s disposable income. A Gini Coefficient of zero indicates perfect income equality, whereas
Expenditure and Outputs in the Irish Health System: A Cross Country Comparison Paul Redmond Overview This document analyzes expenditure and outputs in the Irish health system and compares Ireland to other
An Analysis of the Effect of Income on Life Insurance Justin Bryan Austin Proctor Kathryn Stoklosa 1 Abstract This paper aims to analyze the relationship between the gross national income per capita and
Consumer Credit Worldwide at year end 2012 Introduction For the fifth consecutive year, Crédit Agricole Consumer Finance has published the Consumer Credit Overview, its yearly report on the international
Hong Kong s Health Spending 1989 to 2033 Gabriel M Leung School of Public Health The University of Hong Kong What are Domestic Health Accounts? Methodology used to determine a territory s health expenditure
Indicator On What Resources and Services Is Education Funding Spent? In primary, secondary and post-secondary non-tertiary education combined, current accounts for an average of 92% of total spending in
FDI IN FIGURES December 2014 International investment continues to struggle Figures for the first half of 2014 point to stalled FDI flows Findings FDI fell in the first quarter of 2014 before rebounding
Last updated: 4 September 2015 Reporting practices for domestic and total debt securities While the BIS debt securities statistics are in principle harmonised with the recommendations in the Handbook on
Central Government Budget Bill for 2014 September 30th 2013 1 Spain Macroeconomic Scenario Year on year % change 2012 2013 2014 Real GDP -1,6-1,3 0,7 Nominal GDP -1,7-0,3 2,1 Private Consumption -2,8-2,6
From: Government at a Glance 2009 Access the complete publication at: http://dx.doi.org/10.1787/9789264075061-en Delegation in human resource management Please cite this chapter as: OECD (2009), Delegation
OECD Paris, 13 April 2016 Development aid in 2015 continues to grow despite costs for in-donor refugees 2015 Preliminary ODA Figures In 2015, net official development assistance (ODA) flows from member
Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C. Government Debt and Macroeconomic Activity: A Predictive Analysis
The Determinants of Global Factoring By Leora Klapper Factoring services can be traced historically to Roman times. Closer to our own era, factors arose in England as early as the thirteenth century, as
OECD - Paris, 8 April 2015 Development aid stable in 2014 but flows to poorest countries still falling Key aid totals in 2014 Detailed summary In 2014, net official development assistance (ODA) flows from
Board of Governors of the Federal Reserve System International Finance Discussion Papers Number 1011 December 010 Fiscal Positions and Government Bond Yields in OECD Countries Joseph W. Gruber Steven B.
The U.S Health Care Paradox: How Spending More is Getting Us Less Elizabeth H. Bradley Yale School of Public Health Lauren A. Taylor Harvard Divinity School 1 The paradox Then there's the problem of rising
Health Care a Public or Private Good? Keith Schenone December 09, 2012 Economics & Institutions MGMT 7730-SIK Thesis Health care should be treated as a public good because it is not an ordinary commodity
2014 IMD World Talent Report By the IMD World Competitiveness Center November 2014 IMD World Talent Report 2014 Copyright 2014 by IMD: Institute for Management Development, Lausanne, Switzerland For further
July 2015 Globally, house prices continue a slow recovery. The Global House Price Index, an equally weighted average of real house prices in nearly 60 countries, inched up slowly during the past two years
NIESR Fiscal Consolidation During a Depression Nitika Bagaria*, Dawn Holland** and John van Reenen* *London School of Economics **National Institute of Economic and Social Research October 2012 Project
Income INTECH Global Income Managed Volatility Fund Australia 0.0066 0.0375 Austria 0.0045 0.0014 Belgium 0.0461 0.0138 Bermuda 0.0000 0.0059 Canada 0.0919 0.0275 Cayman Islands 0.0000 0.0044 China 0.0000
The Role of Banks in Global Mergers and Acquisitions by James R. Barth, Triphon Phumiwasana, and Keven Yost * There has been substantial consolidation among firms in many industries in countries around
University Press Scholarship Online You are looking at 1-10 of 19 items for: keywords : current account deficits United States current account deficits: A stochastic optimal control analysis 1 in Stochastic
BIS CEMLA Roundtable on Fiscal Policy, public debt management and government bond markets: issues for central banks Is monetary policy constrained by fiscal policy? by Carlos Montoro 26-27 November 212
BIS database for debt service ratios for the private nonfinancial sector Data documentation The debt service ratio (DSR) is defined as the ratio of interest payments plus amortisations to income. As such,
U.S. Trade Overview, 213 Stephanie Han & Natalie Soroka Trade and Economic Analysis Industry and Analysis Department of Commerce International Trade Administration October 214 Trade: A Vital Part of the
What Drives a Successful Fiscal Consolidation? Pablo Hernández de Cos Enrique Moral-Benito May 2012 Abstract Fiscal consolidations are currently in the agenda of fiscal authorities in many countries. Using
TOWARDS PUBLIC PROCUREMENT KEY PERFORMANCE INDICATORS Paulo Magina Public Sector Integrity Division 10 th Public Procurement Knowledge Exchange Platform Istanbul, May 2014 The Organization for Economic
Internet address: http://www.bls.gov/fls USDL: 04-2343 Technical information: (202) 691-5654 For Release: 10:00 A.M. EST Media contact: (202) 691-5902 Thursday, November 18, 2004 INTERNATIONAL COMPARISONS
Indicator How Many Students Finish Tertiary Education? Based on current patterns of graduation, it is estimated that an average of 46% of today s women and 31% of today s men in OECD countries will complete
Dualization and crisis David Rueda The economic crises of the 20 th Century (from the Great Depression to the recessions of the 1970s) were met with significant increases in compensation and protection
DOCTORAL (Ph.D) THESIS UNIVERSITY OF KAPOSVÁR FACULTY OF ECONOMIC SCIENCE Department of Finance and Economics Head of Doctors School: DR. GÁBOR UDOVECZ Doctor of the Hungarian Academy of Sciences Supervisor:
123 Primary submission: 21.10.2013 Final acceptance: 08.05.2014 Current-Account Imbalances and Economic Growth During the 2008-2009 Financial Crisis: an Empirical Analysis Rossitsa Rangelova 1 ABSTRACT
Insurance corporations and pension funds in OECD countries Massimo COLETTA (Bank of Italy) Belén ZINNI (OECD) UNECE, Expert Group on National Accounts, Geneva - 3 May 2012 Outline Motivations Insurance
4 Distribution of Income and Wealth 53 54 Indicator 4.1 Income per capita in the EU Indicator defined National income (GDP) in per capita (per head of population) terms expressed in Euro and adjusted for
What Is the Total Public Spending on Education? Indicator On average, OECD countries devote 12.9% of total public expenditure to, but values for individual countries range from less than 10% in the Czech
2015 IMD World Talent Report By the IMD World Competitiveness Center November 2015 IMD World Talent Report 2015 Copyright 2015 by IMD Institute for Management Ch. de Bellerive 23 P.O. Box 915 CH-1001 Lausanne
BIS Working Papers No 69 Current account adjustment and capital flows by Guy Debelle* and Gabriele Galati** Monetary and Economic Department February 25 * Reserve Bank of Australia ** Bank for International
How Much Are Teachers Paid? Indicator The statutory salaries of teachers with at least 15 years of experience average USD 38 914 at the primary level, USD 41 701 at the lower level and USD 43 711 at the
From: Education at a Glance 2012 Highlights Access the complete publication at: http://dx.doi.org/10.1787/eag_highlights-2012-en How many students study abroad and where do they go? Please cite this chapter
The Norwegian economy Slower speed ahead, but still growth Strong mechanisms support mainland economy Wriggle room to smooth business cycles Rune Bjerke CEO Just how bad is it? Slower speed ahead but still
VULNERABILITY OF SOCIAL INSTITUTIONS 2 December 2014 Paris Seminar in Demographic Economics Falilou FALL Senior Economist OECD Economics Department 1 Introduction and outline Social institutions and the
Improving the quality and flexibility of data collection from financial institutions Milan Nejman 1, Otakar Cejnar 1, Patrick Slovik 2 Abstract: The recent financial crisis has revealed important limitations
Rebecca FREEMAN July 2008 OECD Statistics Directorate Division of Structural Economic Statistics LABOUR PRODUCTIVITY INDICATORS COMPARISON OF TWO OECD DATABASES PRODUCTIVITY DIFFERENTIALS & THE BALASSA-SAMUELSON
KDI International Conference on Household Debt from an International Perspective: Issues and Policy Directions Consumer Over-indebtedness and Financial Vulnerability: Evidence from Credit Bureau Data By
PUBLIC VS. PRIVATE HEALTH CARE IN CANADA Norma Kozhaya, Ph.D Economist, Montreal economic Institute CPBI, Winnipeg June 15, 2007 Possible private contribution Possible private contribution in the health
Gross Domestic Product (GDP) 1. Size of GDP 2. GDP growth 3. GDP per capita 15 1. Size of GDP 1. Gross Size domestic of GDP product (GDP) is the standard measure of the value of final goods and services
WP/5/181 A Global View of the U.S. Investment Position Andrew Swiston 25 International Monetary Fund WP/5/181 IMF Working Paper Western Hemisphere Department A Global View of the U.S. Investment Position
Economic Growth and Debt Dynamics Efrem Arpa and Kevin Vella * The empirical evidence available for Malta shows that the evolution of national income and the implied cyclical developments have important
THE LOW INTEREST RATE ENVIRONMENT AND ITS IMPACT ON INSURANCE MARKETS Mamiko Yokoi-Arai Current macro economic environment is of Low interest rate Low inflation and nominal wage growth Slow growth Demographic
Factors affecting the inbound tourism sector - the impact and implications of the Australian dollar 1 Factors affecting the inbound tourism sector - the impact and implications of the Australian dollar
JULY 2012 EURO AREA EXCHANGE RATE-BASED COMPETITIVENESS INDICATORS: A COMPARISON OF METHODOLOGIES AND EMPIRICAL RESULTS by Bernadette Lauro and Martin Schmitz, 1 This paper will be presented at the Sixth
External debt statistics of the euro area Jorge Diz Dias 1 Directorate General Statistics European Central Bank Final version 12 October 2010 IFC Conference on Initiatives to address data gaps revealed
OECD Economic Outlook, Volume 2012/1 OECD 2012 Chapter 4 MEDIUM AND LONG-TERM SCENARIOS FOR GLOBAL GROWTH AND IMBALANCES 191 Introduction and summary This chapter considers long-term prospects and risks
PUBLIC & PRIVATE HEALTH CARE IN CANADA by Norma Kozhaya, Ph.D. Economist, Montreal Economic Institute before the Canadian Pension & Benefits Institute Winnipeg - June 15, 2007 Possible private contribution
BANK FOR INTERNATIONAL SETTLEMENTS P.O. BOX, 4002 BASLE, SWITZERLAND PRESS RELEASE CENTRAL BANK SURVEY OF FOREIGN EXCHANGE AND DERIVATIVES MARKET ACTIVITY IN APRIL 1998: PRELIMINARY GLOBAL DATA The BIS
Journal of Economic Integration 21(1), March 2006; 21-39 The Impact of U.S. Economic Growth on the Rest of the World: How Much Does It Matter? Vivek Arora International Monetary Fund Athanasios Vamvakidis
Leading Macroeconomic Indicators: International Experience in Calculating & Using these Indicators Presentation for the Economic Committee of the National Assembly Hanoi, August 15, 2012 Sanjay Kalra IMF
Indicator to Which fields of education are students attracted? Women represent the majority of students and graduates in almost all OECD countries and largely dominate in the fields of education, health
Figure 1 Statutory corporate income tax rates 7 6 1982 2001 5 4 3 2 1 Austria Belgium Canada Finland France UK Germany Greece Ireland Italy Japan Netherlands Notes: For countries using different tax rates,
The global economy Banco de Portugal Lisbon, 24 September 213 Mr. Pier Carlo Padoan OECD Deputy Secretary-General and Chief Economist Summary of presentation Global economy slowly exiting recession but
Indicator What Proportion of National Wealth Is Spent on Education? In 2008, OECD countries spent 6.1% of their collective GDP on al institutions and this proportion exceeds 7.0% in Chile, Denmark, Iceland,
Financial market integration and economic growth: Quantifying the effects, Brussels 19/02/2003 Presentation of «Quantification of the Macro-Economic Impact of Integration of EU Financial Markets» by London
Economic & Labour Market Review Vol 3 No 1 October 29 ARTICLE Graeme Chamberlin Linda Yueh University of Oxford Recession and recovery in the OECD SUMMARY During the last year the global economy has experienced
72/2015-21 April 2015 Provision of deficit and debt data for 2014 - first notification Euro area and EU28 government deficit at 2.4% and 2.9% of GDP respectively Government debt at 91.9% and 86.8% In 2014,