Questions tagged [government-debt]

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1answer
63 views

Understanding the effects of government deficit on international trade

Understand that I'm a total novice with regard to economics. Also, while I ultimately have an axe to grind (doesn't everyone?) I'm not trying to do that honing here, I'm simply looking for a sanity ...
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1answer
47 views

Purchase of the public debts by the ECB

In France, one of the presidential candidate said that the European Central Bank should purchase the public debts of the country and transform it into a perpetual debt (this is a literal translation, ...
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37 views

Can one calculate how much increasing the US federal debt affects the "value" of the dollar?

As I understand it, if the US government runs a deficit then it (for the most part) "pays" for that deficit by "selling" government bonds. This tends to drive up interest rates somewhat, but also, ...
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1answer
73 views

Confusion regarding debt to GDP ratio

While looking at debt to GDP ratio of various countries, I had difficulty with different figures on different websites. Look at this which shows China's debt to GDP ratio as 43.9%: http://www....
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2answers
124 views

Why are German bonds used as the reference for the calculation of Eurozone bond spreads?

I can't find the source, either on the the ECB homepage or any other internet source to verify why German bonds are used as a reference point in the eurozone when talking about risk spreads for other ...
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1answer
208 views

Government debt and Fiscal Theory of Price Level

I am trying to understand the Fiscal Theory of Price Level (FTPL) and how it explains inflation. I've been reading several papers by Eric Leeper and I am slightly confused about some of his claims. ...
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1answer
720 views

Difference between "Debt Held by the Public" and "Total Public Debt Outstanding"?

On https://www.treasurydirect.gov/NP/debt/rss, we have three numbers: ...
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1answer
36 views

Help in interpreting data - Deficit

I was looking at the deficit for different countries http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_10q_ggnfa&lang=en How shall they be read? For instance Greece had a -15% in Q4 ...
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2answers
4k views

What would happen if China called in its debt?

I was talking with a friend of mine the other day about Trump putting the 35% tax on all overseas manufacturing. Couldn't this hurt those countries that have plants where US manufacturing comes from? ...
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36 views

Deficit: can be seen as a return?

Suppose I have a series of debt as % of GDP. By computing returns on this serie e.g. debt as % of GDP in year 1 is 50% in year 2 is 60% I compute $(60\%-50\%)/50\%$ can I interpret this measure as ...
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1answer
343 views

Burden of debt; Internal or external financing? [closed]

Q1) How does the burden of an external public debt differ from that of an internal public debt? Q2) Are there sny conditions under which neither external nor internal debt is a burden to a nation?
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1answer
3k views

What's the difference between Quantitative Easing and regular central bank operations?

Most articles describe QE as purchasing government securities on the market. I thought that was what ordinary day to day operations of the central bank were in their efforts to maintain a target ...
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2answers
245 views

Financing U.S. government budget deficits, and their impact on interest rates

I have two questions. The first is about how exactly the U.S. government finances a budget deficit. The second is about the effects of budget deficits on financial markets and interest rates. Q1. We ...
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1answer
71 views

Could a hike in interest rates cause a country to be unable to pay back it's debt burden?

Sometimes I read in news articles, that a central bank can't hike the interest rates much higher, because then the government would be unable to pay the interest rate burden of it's government debt. ...
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2answers
74 views

What determines the rate of interest on national debt for a country?

From what I understand of Canada's rate of interest on the debt, after Pierre Trudeau, it was around 17.4%, after Mulroney, it was around 7%, and after Harper it was around 5.2%. Finding these ...
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15k views

What's the difference between public debt, government debt and national debt?

When it comes to non-private debt, I hear these three terms the most, but I am not sure if they're interchangeable or discernible. Also, are they recorded in the balance of payments? I'm guessing if ...
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1answer
30 views

What does it mean to say that deficits are financed by debt issue?

Let $B_t$ be real net government debt, let $G_t$ be public spending, let $T$ be net tax revenue (i.e, tax income minus transfers), and ignore everything else. One can show, $$B_{t+1} = (1+r)B_t + G - ...
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2answers
378 views

Primary dealers in treasury auctions

When the treasury or equivalent institution of a country auctions of government bonds there is frequently (i.e. in most countries) some sort of restriction on who can participate. The term primary ...
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0answers
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What's the ECB share of euro area gov debt?

Where can I see an evolution of the ECB's share in the market for Euro area governmental debt? I would like to know if there's something similar happening in Euro area as is happening with Fed's ...
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1answer
263 views

Debt-to-GDP or Debt-to-Revenue?

Which is a better measure of the health of an economy between Debt-to-GDP and Debt-to-Revenue? Why?
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1answer
52 views

Effect of government debt on tax rates?

Is there any well known study that links government debt to tax rates? I have been searching the literature for some time now and haven't found any. More importantly, could government debt track tax ...
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0answers
135 views

What's the difference between public debt, national debt and government debt? [duplicate]

When it comes to non-private debt, I hear these three terms the most, but I am not sure if they're interchangeable or discernible. Also, are they recorded in the balance of payments? I'm guessing if ...
0
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1answer
791 views

What would happen if tomorrow all private and public debt was erased? [closed]

The question is what would happen if tomorrow all private and public (government) debt was erased? I am especially curious if normal daily economic activities would go on, what would the role of ...
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2answers
56 views

Different values for US Public Debt, why?

In this OECD link we have the US General government debt. The value is close to 120% of GDP. However, the wikipedia has the US Federal Gov debt at 80%. Why is there such a difference? What debt is ...
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1answer
53 views

The appeal of low-dividend stocks when trading with government debt

Background: In the 1710s, the British government borrowed heavily to finance wars. To reduce the interest on this debt, the government converted this debt into stock from a private company. The ...
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2answers
78 views

The Fed may increase the rates. But will that make the government debt unsustainable?

The US Fed is increasing its interest rate targets. These rates will eventually affect most other interest rates in the US economy. In particular, interest rates on US government bonds will also ...
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2answers
51 views

Macroeconomic effects of Profit Maximizing Federal Reserve

The Fed makes money through its open market operations. I am considering a scenario in which the Fed, instead of trying to achieve goals like controlling inflation, tries to maximize its profits in ...
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1answer
41 views

Differences between international and national creditors

When considering a nations debt, how does it affect the nation whether its debt is held by national or international creditors? If there is preference does this translate into different prices for the ...
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0answers
24 views

The intersection of geopolitical wrangling and economics

It seems that economic threats have become a mainstay in geopolitical saber rattling. For example: http://www.nytimes.com/2016/04/16/world/middleeast/saudi-arabia-warns-ofeconomic-fallout-if-...
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2answers
121 views

How did Portugal draw down their interest rates on pubic debt?

I notice that Portugal had a very high interest rate on its national bond issues back in 2012 but since then it has drawn down significantly: How were they able to decrease the interest rate?
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1answer
102 views

Argentine default: "Rights upon future offers"

Argentina defaulted on its sovereign debt in 2002. It has reached an agreement with most but not all of its creditors. Wikipedia has a pretty good summary. The agreements included a 70% hair cut but ...
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1answer
56 views

Why do Latin American countries fare among the worst at managing inflation

Does it have to do with cultural factors? Ex: they were colonies of Spain and Portugal who themselves are not that great at managing their economies relative to other western European countries.
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1answer
65 views

Can a country's default on internal debt affect the rates of the external debt?

If a country is ready to default on internal debt and ready to confiscate their citizen's money to pay external liabilities, does that affect the yields of the external debt? If yes, does that make ...
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0answers
18 views

How does the euro swap for Greek debt work?

As I understand it, some portion of the Greek sovereign debt has been converted into "Euro swaps". Can someone explain in simple terms what that means? What debt was given to whom?
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2answers
165 views

Why is government debt level presented as ratio to GDP, not against government budget or revenue size?

A country's public debt is often presented as ratio to GDP. For example, in Wikipedia, List of countries by public debt or National debt of the United States both use ratio or percentages of GDP. ...
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1answer
1k views

How much leverage has the Federal Reserve taken on today (Jan 2016)?

http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html?mid=twitter-share-di What makes you most nervous about the future? Debt. The idea that growth will ...
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3answers
287 views

Will major economies be able to repay their debt?

According to The Economist, lots of major economies are in debt to the extent of it consuming most of the countries' GDP. And the whole system almost seems to resemble a Ponzi scheme at a macro level. ...
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1answer
72 views

Fannie Mae and Freddie Mac as substitute benchmark bonds

"The reduction seen in US government debt in the late 1990s has led to a redution in the supply of intermediate and long-term government bonds, and some concern has arisen over this fact. In the ...
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1answer
52 views

European Government Bonds correlations [closed]

Why do European Government Bonds 10Yr (or at least some of them) have such a high level of correlation?
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4answers
5k views

Why can't a government print money to pay its debt?

I have written an explanation to one of the famous questions "why can't government print money to pay its debt". Is my explanation correct? Is this the similar situation which happens in ...
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1answer
38 views

What happens to the money that the government is in debt from?

Since nearly all countries are in debt except for four (http://www.therichest.com/rich-list/rich-countries/the-only-5-countries-in-the-world-living-debt-free/), where does all the money that the other ...
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1answer
768 views

Why is the Bank of Japan buying all the government bonds?

I've recently read that the Bank of Japan is continuously buying government bonds. Apparently, at the rate they are going, the BoC will own all the bonds by 2026, which means the government will ...
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1answer
55 views

negative interest rate lending ripple effects

I was attempt to describe the ramifications of negative interest rates across benchmarks. I can foresee the business practice changes amongst holders of government bonds, savings accounts, ...
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0answers
107 views

Why might a country with a budget surplus continue issuing bonds - ie borrowing?

Some argue that if a government runs a budgetary deficit, it is a drag on the public finances because taxpayers must fund interest payments to external creditors. If the interest payments were an ...
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2answers
1k views

Who owns German debt?

I know that Germany has huge external debt. I don't know how to find out which entities own this and especially which country they belong to.
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1answer
15 views

Do new treasuries stop being issued during a debt suspension period?

Apparently the United States has been in a "debt suspension period" for the last 175 days, or almost 6 months. Does that mean for the last 6 months no new US Treasury Notes and Bills have been issued?...
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1answer
88 views

What happens to undated government stocks when interest rates dip below the coupon rate?

What happens to undated government stocks (debt— known as "bonds" in the US) which pay a coupon and have an embedded call option, when interest rates dip below the coupon rate? Will the market value ...
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2answers
508 views

Public debt of European countries, by year

Where can I find lists with public debt of European countries such as the UK, by year? (or by fiscal year) If there are such lists on Eurostat but only for the last 10 year or so, I would like to ...
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1answer
54 views

How did downgrading bonds contribute to Greek crisis?

According to an article I read, one of the steps that was used to contribute to the Greek downfall was that bankers downgraded the bonds of the country. This immediately makes the interest rates (“...
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0answers
31 views

Sovereign debt market learning resources

I'm trying to understand this paper, but I'm having some difficulties in understanding some parts. Is there good quick introduction about how the sovereign debt market works? The paper is about greek ...