In this paper we analyze how the primary surplus to GDP ratio in the US reacts to variations in the public debt-GDP ratio. In contrast to earlier studies we perform non-parametric and semi-parametric estimations. Our results show that the response of the primary surplus to GDP ratio is a positive nonlinear function of the debt-GDP ratio. Further, our estimations demonstrate that the coefficient...

This paper studies the relationship between public debt and economic growth for selected emerging markets performing panel data estimations. Several regressor variables are included, but the main focus is on public debt. The results reveal a significant positive correlation between public debt and the subsequent growth rate of per capita GDP. Population and investment also yield a significant p...

The main motivation of this paper is to study the impact of the composition of creditors on the probability of default and the corresponding default risk premium on sovereign bonds, when there is debtor moral hazard. In the absence of any legal enforcement, relational contracts work only when there are creditors who have a repeated relationship with the borrower. We show that ownership structur...

We postulate a new method of measuring debt which we call the debt burden (DB). We claim that DB reveals the true debt obligations of the fiscal authority by taking the intertemporal debt obligations of the government into account. It is more accurate and more transparent than the currently used methods of assessing debt. DB is calculated on a daily basis and it clearly identifies debt risks. I...

This paper considers a Ramsey model of linear capital and labor income taxation in which the government cannot commit ex-ante to a sequence of policies for the future. In this setup, if the government is more impatient than the government, the capital income tax will always be positive in steady state. Thus, impatience and lack of commitment are able to generate positive capital taxes in the lo...

Can debt be used to finance growth? This question has stimulated a number of research papers, seminars and conferences. To date, however, no clear answer to the question is available. This paper attempts to answer the question using meta-analysis. Meta-analysis allows researchers to combine the results from both published and un-published research to gain insights regarding the directional and ...

This paper argues that the IMF financial and good technical assistance to Russia in the 1990s has been less than generous. Not only the size of the assistance might have not been adequate but also the timing and actual disbursements of these funds were in sharp discord with pledges. More importantly, the IMF made a number of serious policy mistakes in both design and the implementation of the r...

We show that sovereign debt impairments can have a significant impact on financial markets and real economies through a credit ratings channel. Specifically, we find that firms reduce their investment and reliance on credit markets due to a rising cost of debt capital following a sovereign rating downgrade. We identify these effects by exploiting exogenous variation on corporate ratings due to ...