Questions tagged [government-debt]
The government-debt tag has no usage guidance.
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What does US Debt maturity means?
Read the following news article but couldn't figure out what it entails. Will the government need to print money to pay the current the debt? Or will it take on new debt to pay the old debt? More ...
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Relation between High government debt to GDP ratio, financial stability of a country and repricing effect on balance sheet of banks
Was reading an editorial in which author wrote following:-
I understood it as follows:
India having High Debt/GDP(around 84%), means Foreign portfolio investors(FPIs) will have less confidence to ...
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calculation of general government debt from reserve bank of India's annual report
As per Reserve Bank of India's report,
The general government deficit and debt moderated to 9.4 per cent and 86.5 per cent of GDP, respectively, in 2022-23 (BE) from the peak levels of 13.1 per cent ...
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Why does the US government's credit rating have an impact?
To clarify, I mean why does the credit rating given to the US government by specific rating agencies matter? It seems like the reliability of the US government (or other first world nations) is common ...
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How do governments rollover debt with bonds?
Here is a link to a article I've been reading:
https://www.stlouisfed.org/on-the-economy/2021/march/servicing-national-debt
In this article it says:
"While household debt must eventually be ...
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If 15 percent of jobs are becoming automated compared to 1993, why are retirement ages rising?
Given that human labour is less necessary with every year that passes, why not tax automation rather than raise the age of retirement?
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Relationships between several economic concepts, and chatGPT's explanation [closed]
Sadly I have so little knowledge of economics that I can barely read the news these days. Answering my questions the old fashioned way (via Google) tends to confuse me more. So I asked chatGPT, but I ...
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Complete markets and convenience yields
I have been reading some papers on the safety/liquidity of US government debt and got a bit perplexed by the assumptions made in some of those papers. For example, this paper by Mehrotra and Sergeyev ...
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Government debt held by the Federal Reserve
The Federal Reserve delivers its profits, after expenses, to the US Department of the Treasury. The Federal Reserve also holds several trillion dollars' worth of government debt. So when the ...
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Are the available US National debt numbers gross or netted?
For instance, we know that Japan holds a large part of the foreign US debt, and at the same time, the US holds a foreign debt to Japan. My question is are the debt numbers of the US (for example, the ...
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Expected vs actual inflation and the real debt burden
The real rate of return is given by:
1+r=(1+i)/(1+π)
and it can easily be shown that:
1+r ≈ i-π+1 so that r ≈ i-π
This can be used to calculate real rates of return, or equivalently the real debt ...
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Real debt burden
Many economists believe real interest payments-to-GDP is a superior measure of debt service burden than nominal interest payments-to-GDP. My question is why we divide real interest payments by nominal ...
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How do higher debt-servicing costs cause financial crises?
I want to understand the context of an article (Economist, Finance and Economics section, Oct 28th, 2022)
Bruno Le Maire, France's finance minister:
"Money is no longer interest-free in the new ...
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Price v return on gilts
Please forgive a very basic question from a non-economist, just trying to understand the current chaos in the UK markets. I gather that return on gilts (Government bonds) is in inverse proportion to ...
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How would US eliminate its $31T debt?
ABC news indicates US starts fiscal year with record $31 trillion in debt
Is there any other mechanism besides taxation (of incomes, goods, services) that could reduce said debt?
Individual / ...
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Can a country be debt free?
I'm currently learning about Modern Monetary Theory and why government debt is not necessarily a problem, because the debt of the government is the wealth of the people and businesses of the nation (I ...
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Does inflation affect debt-to-gdp ratio?
So consider this indicator https://fred.stlouisfed.org/series/GFDEGDQ188S I am wondering since Debt is nominal and GDP is also nominal, is it possible for inflation to have an effect on this ratio?
I'...
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Is debt to GDP ratio a misleading statistic to show the level of indebtedness of a government?
The Debt to GDP ratio is a very popular statics to show the level of indebtedness of a government, so much that is even used in the Euro convergence criteria.
However its use seems misleading to me, ...
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Was the 1991 financial crisis in Sweden caused by the financial market?
I'm reading How Will Capitalism End? by Wolfgang Streeck, and in the chapter on fiscal consolidation, he claims Sweden was punished by financial markets in 1991 for its expansive fiscal policy.
I've ...
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Is the Federal Reserve waiving itnerest payments on its treasury portfolio?
I read a rumor on a forum that the Federal Reserve has recently (since the pandemic) been waiving interest payments on its portfolio of US treasury bonds and notes.
I was unable to verify this rumor ...
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How does inflation make the impact of public debt better?
Why is a high rate of inflation better for weathering effects of a huge govt. debt ?
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Where do governments get their loans from?
Do governments get loans from the private banks? Or do they loan directly from the central banking institutes? And how is the interest rate determined for these loans (say for a fixed maturity), is ...
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Debt sustainability vs dynamics
Im having trouble understand the difference, I have both the equations but still fail the meaning of each. Cant find any source that explains this. Any help or guidance to where I could find it would ...
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Why there's a large difference between fiscal deficit and debt to GDP ratio of a country?
The fiscal deficit is the gap between expenses and earnings. For the fiscal year 2020-21, India's debt to GDP ratio was 59.3%; and the fiscal deficit was 9.2% of GDP.
How come debt is larger than the ...
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What are the consequences of an increase in interest rates for States?
As inflation is high, central banks such as the FED and the ECB hike rates.
One of the consequences is that the stock market is falling and in particular companies having a lot of debt (such as ...
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How is North Korea paying for all its imports?
As far back as the 1980s it seems that North Korea has imported more than it exported. Given that they weren’t exactly a wealthy country back then, and as most countries stopped debt financing ...
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Are there any historical fixes to high interest on national debt
If I were to buy a bond of Argentina, like AL30, it is worth ~30 cents for every dollar, if I understand correctly, this means that, if the country required more money and issues more bonds the value ...
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List of private investors who own the most US debt
At this website (document `Federal debt', table FD-5) I see that more than 16 trillion dollars of US debt is owned by private investors. Is there a list available of the private investors who own the ...
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When debt to GDP is only around 85%, how can this article quote as 300%?
I was reading an article in FT, where debt to GDP is quoted as 300% for US and Japan. However, all the official sites for US quotes the debt to GDP as 85% for US.
This article is from a reputed ...
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Sources for information about Danish general government finances since 2000 (in English)
for a report I have to write about Danish public finances and fiscal policy (budget balance, debt, revenues, expenditures) I'd like detailed information dating back to 2000 or publications giving an ...
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Problem with the definition of external debt
This is how external debt is explained in wikipedia:
"In public finance, external debt (or foreign debt) is the component of the total government debt which is owed to foreign creditors; its ...
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Have there been more US CDS curve inversions since 2011, and do these correlate with (political) disputes around the debt ceiling?
Gori proposes a model of the 2011 US debt ceiling crisis in which the spread (and ultimately inversion) of the US government credit default swaps (1Y/2Y vs 5Y) is used as a proxy measure for the ...
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Economic indicators for government debt (sovereign debt)
I am looking at sovereign debt as a percentage of GDP. However, due to external factors like exchange rates, the percentage may change from one year to the next even if a government did not borrow any ...
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Relationship between taxation, national debt, and pool of private investment money
We've all heard the argument that an increase in taxation of the wealthy, or of investment earnings in particular (capital gains + dividends) will discourage investment and hurt the overall economy. ...
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Do governments have to pay interest on government debt held by the central bank?
Through open market operations, the central bank may buy government debt to increase the money supply. Does the government need to pay interest on the debt held by the central bank, or does the debt ...
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Krugman article - Government debt helps avoid a destructive scramble for cash?
I was just reading this Krugman article which contains the words...
I’ve already mentioned that having at least some government debt
outstanding helps the economy function better. How so? The answer,
...
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The link between economic growth, inflation, interest rates and fiscal deficit
I want to ask a question about how economic growth, inflation, interest rates is linked to fiscal deficit.
I was reading a book on introductory economics and the following passage came up:
If a ...
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Relation between budget deficit and inflation?
In Iran we have had a high inflation rate for several decades (usually above 20 percent). Some of the top economists of the country say that it is mainly because the government spending is ...
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How to weakly predict T-bill rates?
I know, I know -- if I could predict Treasuries, I could leverage that information, various forms of the EMH, etc. But a lot of people have mortgages (ARMs) tied to US1Y, and so having some kind of ...
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Is there a “runaway” threshold for Debt-to-GDP Ratio in the U.S.?
Last year, when Congress was debating the stimulus/relief packages, one Senator made a comment about the debt-to-GDP ratio and how we are approaching a point in that ratio that will have some major ...
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Do Fed OMOs directly and immediately increase M1 or M2 if they buy treasuries from a member bank? And what proportion of OMOs does that constitute?
I commonly hear that when the Fed conducts open market operations, it is directly increasing the money supply by exchanging newly created electronic money for US treasuries. But in the case where the ...
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detailed account of government borrowing and fed open market operations
I would like to read an extremely detailed (yet, if possible, accessible) account of exactly what happens when the US government borrows money -- how rates are negotiated, who exactly the ...
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How are sovereign bond interest rates determined?
They are a lot of questions about the price of a bond or its yield.
Why do people buy negative interest rate bonds?
How did Portugal draw down their interest rates on pubic debt?
... and so on
Mine ...
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Financial manipulation and Inflation as tools for sovereign debt default
In the book This Time Is Different, by Reinhart and Rogoff, in chapter 8, the authors state that
Higher minimum level of reserves (?)
And/or upper bound/ceiling to interest rates ( will help increase ...
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First order approximation of consolidated budget constraint describing the evolution of government debt
I am trying to derive a first order approximation of the government's budget constraint around a zero inflation steady state.
This is from Jordi Galís 2020 paper "The effects of a money-financed ...
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Is there a source which informs the public of who is buying up newly issued U.S. Government debt?
Is there a list somewhere of who is buying the newly issued debt that will finance the American Rescue Plan (the $1.8 trillion stimulus package signed recently)? Of course, I have an idea of who owns ...
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Why isn't high inflation along with robust welfare a 'good' system?
High inflation, by definition, means that the demand for goods and services is higher compared to the demand for currency. In other words, people are more willing to give up currency for goods and ...
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Risks asscoiated short term stimulus as interest rates approach zero
TL;DR
Government interest rates are approaching zero.
What are the risks to borrowing large sums in the current enviroment? Would inflation occur?
Full Story
I was recently reading an article about ...
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How does the treasury determine the rates of the bonds they sell?
My understanding is that price and yields are determined via supply and demand. How are the interest rates determined when the bonds are auctioned off?
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What are the economics advantages for not rolling a debt (as a country)
Let's assume that a country has a GDP growth rate of approximately 1% per year (the number is not important). Then the government of such a country can theoretically roll its current debt and even ...
