Fiscal Deficit and Public Debt in Industrial Countries, 1970-1994

Author/Editor:

Domenico Fanizza ; Vito Tanzi

Publication Date:

May 1, 1995

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 assembles a set of relevant fiscal data, for both the individual countries and for the aggregate G-7 and 18 industrial countries, which covers a period long enough to allow an assessment of trends and the conduct of econometric tests. The “world” fiscal deficit has been rising since the 1970s and reached a historic high in 1993-94; the rise of the deficit has been accompanied by a significant decline in world saving. The paper argues that the increase in public debt, which has been the consequence of the accumulation of the fiscal deficits, has pushed up worldwide interest rates. Econometric evidence in support of this relationship is presented on the basis of panel data for the period 1970-93.

Series:

Working Paper No. 95/49

English

Publication Date:

May 1, 1995

ISBN/ISSN:

9781451846782/1018-5941

Stock No:

WPIEA0491995

Format:

Paper

Pages:

38

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