Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159719
Authors: 
Marattin, Luigi
Year of Publication: 
2013
Series/Report no.: 
Quaderni - Working Paper DSE 880
Abstract: 
This paper offers a formal analysis of the relationship between changes in government primary balance and debt-to-GDP ratio. it establishes the conditions under which a fiscal consolidation increases - instead of decreasing - the stock of government liabilities relative to aggregate output. A crucial role is played by the relationship between the elasticities of average cost of debt and nominal output to primary balance: while the former depends on debt maturity and risk premia dynamics, the latter relates to the well-known controversy on the size of government spending multipliers. The paper shows an application to the ongoing fiscal consolidation process in the Eurozone.
JEL: 
E62
H32
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

Files in This Item:
File
Size
356.2 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.