Questions tagged [government-debt]

The tag has no usage guidance.

Filter by
Sorted by
Tagged with
1 vote
1 answer
62 views

How to model discontinuities in sovereign debt interest rates?

For some emerging economies, the interest rates on sovereign debt are sometimes highly volatile: undergoing periods of stability then sharp upward/downward jumps. In continuous-time models, however, ...
cel's user avatar
  • 11
0 votes
1 answer
156 views

Why do governments issue bonds rather than just increasing tax or printing money?

Assuming a government needs to raise money, what are the pros and cons of increasing taxes or printing more money or selling bonds?
JobHunter69's user avatar
1 vote
1 answer
121 views

A generations funds to reduce the debt

In Canada, the Province of Quebec created a generations fund in 2006 in order to reduce the debt. As of March 2023, Québec’s net debt stands at $206.8 billion, or 37.4% of GDP.. Do you know if any ...
Denis Pageau-Sociétalogue's user avatar
0 votes
1 answer
56 views

Does it make sense to evaluate a country's debt in GDP based on PPP?

Consider a fictional country Gudzan-Tservijstan with a GDP of \$100bn USD, a total (public and private) debt of \$100bn USD, and a PPP conversion factor of 2. Are there advantages to considering the ...
mjc's user avatar
  • 101
0 votes
0 answers
37 views

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 ...
Chirag Arora's user avatar
0 votes
0 answers
16 views

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 ...
MR LUN's user avatar
  • 31
1 vote
0 answers
13 views

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 ...
lumber jack's user avatar
0 votes
1 answer
27 views

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 ...
feus4177's user avatar
  • 101
1 vote
1 answer
43 views

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 ...
troy beckett's user avatar
0 votes
1 answer
39 views

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?
bandybabboon's user avatar
2 votes
1 answer
68 views

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 ...
user90664's user avatar
2 votes
0 answers
53 views

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 ...
Wittgenstein's Poker's user avatar
1 vote
1 answer
62 views

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 ...
student's user avatar
  • 21
0 votes
0 answers
28 views

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 ...
Stan Verweij's user avatar
1 vote
1 answer
78 views

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 ...
R.S.'s user avatar
  • 19
0 votes
1 answer
90 views

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 ...
R.S.'s user avatar
  • 19
1 vote
1 answer
29 views

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 ...
Ben's user avatar
  • 13
1 vote
2 answers
222 views

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 ...
TheHonRose's user avatar
1 vote
1 answer
56 views

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 / ...
gatorback's user avatar
  • 199
0 votes
1 answer
51 views

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 ...
zvavybir's user avatar
  • 103
1 vote
2 answers
98 views

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'...
KArrow'sBest's user avatar
2 votes
1 answer
68 views

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, ...
pinpon's user avatar
  • 164
2 votes
1 answer
44 views

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 ...
333inar's user avatar
  • 21
2 votes
1 answer
21 views

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 ...
Lassie Fair's user avatar
  • 1,728
0 votes
1 answer
38 views

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 ?
Ash Rivers's user avatar
0 votes
1 answer
77 views

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 ...
Keep_On_Cruising's user avatar
0 votes
0 answers
10 views

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 ...
Imelda's user avatar
  • 1
0 votes
2 answers
49 views

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 ...
Anurag Pradhan's user avatar
0 votes
3 answers
72 views

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 ...
politinsa's user avatar
  • 101
0 votes
0 answers
67 views

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 ...
M. Y. Zuo's user avatar
  • 121
0 votes
0 answers
27 views

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 ...
EmmanuelMess's user avatar
1 vote
1 answer
112 views

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 ...
Riemann's user avatar
  • 69
0 votes
1 answer
49 views

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 ...
nsivakr's user avatar
  • 177
1 vote
1 answer
21 views

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 ...
Nasan's user avatar
  • 173
0 votes
1 answer
22 views

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 ...
Sasikuttan's user avatar
1 vote
0 answers
11 views

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 ...
Dolphin 613 Motorboat's user avatar
1 vote
1 answer
32 views

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 ...
Arturo Sbr's user avatar
1 vote
4 answers
66 views

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. ...
scottef's user avatar
  • 119
8 votes
3 answers
873 views

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 ...
Flux's user avatar
  • 553
2 votes
3 answers
68 views

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, ...
Mick's user avatar
  • 1,046
2 votes
1 answer
58 views

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 ...
vik1245's user avatar
  • 145
4 votes
2 answers
549 views

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 ...
apadana's user avatar
  • 193
0 votes
2 answers
74 views

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 ...
Charles's user avatar
  • 175
14 votes
1 answer
2k views

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 ...
Jacob Jones's user avatar
3 votes
0 answers
52 views

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 ...
Tim kinsella's user avatar
1 vote
0 answers
29 views

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 ...
Tim kinsella's user avatar
0 votes
1 answer
83 views

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 ...
politinsa's user avatar
  • 101
2 votes
1 answer
34 views

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 ...
An old man in the sea.'s user avatar
2 votes
0 answers
63 views

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 ...
Spotdoddy's user avatar
1 vote
0 answers
26 views

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 ...
M Development's user avatar

1
2 3 4 5