Sovereign debt composition and time-varying public finance sustainability

Afonso, António; Jalles, João Tovar

http://hdl.handle.net/10400.5/25516

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Authors

Afonso, António

Jalles, João Tovar

Abstract(s)

We compute time-varying responses of the sovereign debt ratio to primary budget balances for 13 advanced economies between 1980 and 2012, and assess how fiscal sustainability reacts to different characteristics of government debt. We find that the sustainability time-varying coefficient increases and countries become more fiscally sustainable if they contract a higher share of long-term public debt, if more debt is held by the central bank or if it is easily marketable in capital markets.

Keywords

Sovereign Debt Fiscal Sustainability Time-Varying Coefficients Debt Composition

URI

http://hdl.handle.net/10400.5/25516

Citation

Afonso, António and João Tovar Jalles. (2017). "Sovereign debt composition and time-varying public finance sustainability". The North American Journal of Economics and Finance, Vol. 42: pp.144-155.