Title Fiscal discipline and the cost of public debt service : some estimates for OECD countries / prepared by Francesco Caselli, Alberto Giovannini, and Timothy Lane

Published [Washington, D.C.] : International Monetary Fund, European I Department, 1998 ©1998

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Description 1 online resource (22 pages) Series IMF working paper ; WP/98/55 IMF working paper ; WP/98/55. Summary 1. Public debt expanded rapidly in several industrial countries during the 1980s (Figure 1) reflecting a combination of weak primary fiscal balances and self-sustaining debt dynamics. High public debt has been of concern for several reasons (Giavazzi and Spaventa, 1988). The expense of servicing a high public debt, which in some countries accounts for a large share of government spending and increased substantially over the 1970s and '80s (Figure 2), may contribute to chronic fiscal imbalances, and must ultimately be financed through distortionary taxation. 2 A high public debt may also constrain the monetary authorities' ability to pursue price stability: at the most straightforward level, an unsustainable debt may put pressure on the central bank to monetize some debt to alleviate the burden-a risk that the 60 percent Maastricht debt limit is intended to reduce. 3 The interest cost of servicing the public debt is key both to its sustainability and to the burden it places on the public finances and the real economy; this paper will examine the determinants of this cost Bibliography Includes bibliographical references (pages 21-22) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL English digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Debt service -- OECD countries Debts, Public -- OECD countries Fiscal policy -- OECD countries Debt service Debts, Public Fiscal policy OECD countries Form Electronic book Author Giovannini, Alberto, author. Lane, Timothy D. (Timothy David), 1955- author. International Monetary Fund. European I Department, issuing body. ISBN 1283569248 9781283569248 1451894430 9781451894431 1462314708 9781462314706 1452734135 9781452734132 9786613881694 6613881694 9781451969269 1451969260 ISSN 2227-8885

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