Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries

Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries

A "Fan-Chart" Approach

eBook - 2006
Rate this:
This paper proposes a probabilistic approach to public debt sustainability analysis (DSA) using "fan charts." These depict the magnitude of risks-upside and downside-surrounding public debt projections as a result of uncertain economic conditions and policies. We propose a simulation algorithm for the path of public debt under realistic shock configurations, combining pure economic disturbances (to growth, interest rates, and exchange rates), the endogenous policy response to these, and the possible shocks arising from fiscal policy itself. The paper emphasizes the role of fiscal behavior, as well as the structure of disturbances facing the economy and due to fiscal policy, in shaping the risk profile of public debt. Fan charts for debt are derived from the "marriage" between the pattern of shocks on the one hand and the endogenous response of fiscal policy on the other. Applications to Argentina, Brazil, Mexico, South Africa, and Turkey are used to illustrate the approach and its limitations.
Publisher: Washington : International Monetary Fund, 2006
Copyright Date: ©2006
ISBN: 9781451908633
9781451863277
Branch Call Number: Electronic book
Characteristics: 1 online resource (54 pages)

Opinion

From the critics


Community Activity

Comment

Add a Comment

There are no comments for this title yet.

Age

Add Age Suitability

There are no ages for this title yet.

Summary

Add a Summary

There are no summaries for this title yet.

Notices

Add Notices

There are no notices for this title yet.

Quotes

Add a Quote

There are no quotes for this title yet.

Explore Further

Recommendations

Subject Headings

  Loading...

Find it at MCL

  Loading...
[]
[]
To Top