On domestic debt
Roger Farmer previews his most recent research on how much government debt is needed. His conclusion is that government debt should never be zero because it facilitates trade between current and future generations.
How much debt do we need? My answer: 70{5e7f07e14add20b2e04f4edb85a447d3cd8121fc27b809645e9fed603c22cc5c} of GDP
By: Roger Farmer – University of Warwick
Simon Wren-Lewis in this article dispels five fears associated with increasing government debt.
Government debt phobias, and possible cures
By: Simon Wren-Lewis – Oxford University
On external debt
Blanchard and Das propose a new index which calculates the probability that debt is sustainable at the current exchange rate. They argue that the size of the distribution of exchange rate adjustments implies “that one should be careful in concluding that debt is or is not sustainable at the current exchange rate and that strong measures are potentially needed to reestablish sustainability.”
A New Index of External Debt Sustainability
Authors:Olivier Blanchard, Mitali Das
From: Peterson Institute for International Economics – IMF c
Debt sustainability and financial repression
In this paper Di Casola and Sichlimiris establish a link between financial repression and debt sustainability. They find that in non-advanced economies the higher are the benefits of financial repression to the government, the higher are the sustainable debt levels.
Domestic and External Sovereign Debt
Authors: Paola Di Casola, Spyridon Sichlimiris
From: Sveriges Riksbank
