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Title:Empirical assessment of sustainability and feasibility of government debt: The Philippines case PDF Logo
Authors:Qin, Duo
Cagas, Marie Anne
Ducanes, Geoffrey
Magtibay-Ramos, Nedelyn
Issue Date:2005
Series/Report no.:Working Paper, Department of Economics, Queen Mary, University of London 527
Abstract:This paper develops empirical methods of assessing the sustainability and feasibility of public debt using the No Ponzi Game criterion, using the Philippines as the testing case. Both historical data and forecasts generated by a quarterly macro-econometric model are used in the assessment. Stochastic simulations are carried out to mimic future uncertainty. The test results show that, up to the end of the present administration in 2010, the Philippine government debt is not sustainable but weakly feasible, that the feasibility is vulnerable to major adverse shocks, and that simple budgetary deficit control policy is inadequate for achieving debt sustainability or strengthening feasibility.
Subjects:Government debt
Ponzi game
Rollover bond portfolio
JEL:H62
H63
E62
F34
C53
Document Type:Working Paper
Appears in Collections:Working Paper Series, School of Economics and Finance, Queen Mary, University of London

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