Public Debt, Investment, and Growth: The DIG and DIGNAR Models

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Some knowledge of economics is helpful.
Basic Microsoft Excel skills and access to a computer with a reliable internet connection and a Google Chrome web browser are essential.

All government officials are welcome to register.
Particularly useful for officials from ministries of finance, debt agencies, central banks, and other government agencies responsible for providing advice or implementing macroeconomic and debt policies.

Online course presented by the Institute for Capacity Development and the Research Department.
Explains how to analyze the relation between public investment, growth, and public debt dynamics using two dynamic structural models:
- Debt, Investment, and Growth (DIG) model
- Debt, Investment, Growth and Natural Resources (DIGNAR) model
Presents and discusses the key pieces of these models:
- the investment-growth nexus
- the fiscal adjustment
- the private sector response
Helps learners understand and assess the macroeconomic effects of public investment scaling-up plans, including on growth and debt dynamics.
Elaborates on factors shaping these effects, including:
- the type of fiscal financing
- the rate of return of public capital
- the efficiency of public investment
- the capacity of governments to mobilize revenues

The DIG and DIGNAR models have gained wide acceptance for policy work over the past decade.
Complement analyses done with the IMF and World Bank Debt Sustainability Framework.
Over 65 country applications in the context of Fund-supported programs and surveillance work.
Have informed policy analysis through qualitative and quantitative scenario analyses on topics including:
- public investment surges
- fiscal consolidations
- cash transfers to poor households
- the mix of public current and capital expenditures
- the efficiency of public spending and tax administration
- the collapse of commodity prices
Course will illustrate some of these applications and explain how to interpret the output of policy scenario analyses.

Upon completion, participants should be able to:

Understand the basics of dynamic macroeconomic models for analyzing public investment scale-ups, growth, and debt dynamics.
Understand the key elements of the DIG and the DIGNAR models.
Understand how these models are used to analyze how the macroeconomic effects of public investment surges depend on:
- policy responses
- the type of financing of these surges (e.g., taxes and domestic versus external financing)
- structural factors (e.g., the efficiency of public investment)
Interpret the output of policy scenario analyses using the DIG and DIGNAR models, as reflected in official IMF documents such as Article IV reports.