A Stochastic Framework for Public Debt Sustainability Analysis

 
Author/Editor: Di Bella, Gabriel
 
Publication Date: March 01, 2008
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper proposes a framework for public debt sustainability analysis (DSA) that is complementary to that generally used by IFIs. The DSA in this paper has three components: (i) an integrated and consistent accounting framework for the Consolidated Public Sector (CPS); (ii) the estimation of an appropriate, and country-specific debt threshold, following the approach proposed by Reinhart, Rogoff and Savastano (2003); and (iii) a method for the calculation of the CPS primary balance to achieve the desired debt targets, without resorting to ad-hoc assumptions for the values of the macroeconomic variables during the planning horizon, in the spirit of Garcia and Rigobon (2004) and Celasun, Debrun and Ostry (2006). The paper uses this approach to analyze the sustainability of the Dominican Republic's Public Debt.
 
Series: Working Paper No. 08/58
Subject(s): Debt sustainability | Dominican Republic | Public debt

Author's Keyword(s): Public debt sustainability | central bank operations | risk analysis | debt thresholds.
 
English
Publication Date: March 01, 2008
Format: Paper
Stock No: WPIEA2008058 Pages: 26
Price:
US$18.00 (Academic Rate:
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