Regional Growth, Debt Thresholds and Subnational Sustainability

Collateral, liquidity and debt sustainability

We study the sustainability of public debt in a closed production economy where a benevolent government chooses fiscal policies, including haircuts on its outstanding debt, in a discretionary manner. Government bonds are held by domestic agents to smooth consumption over time and because they provide collateral and liquidity services. We characterize a recursive equilibrium where public debt am...

Sustainability of Public Debt

Subnational Debt of China: The Politics-Finance Nexus*

Using unique proprietary loan-level data, we provide the first comprehensive study on China’s local government debt, which was off-balance sheet. Policy and commercial banks, both of which are state owned, are the main financiers of local governments. We find that notwithstanding their prevalent nonprofit goal of raising social welfare, policy loans perform remarkably better than commercial loa...

Sustainability Debt: A Metaphor to Support Sustainability Design Decisions

Sustainability, the capacity to endure, is fundamental for the societies on our planet. Despite its increasing recognition in software engineering, it remains difficult to assess the delayed systemic effects of decisions taken in requirements engineering and systems design. To support this difficult task, this paper introduces the concept of sustainability debt. The metaphor helps in the discov...

Bridging the Gap: Social Capital and Subnational Regional Development