Advanced Search
MyIDEAS: Login

Dette publique. Du risque d'insoutenabilité au risque d'illiquidité

Contents:

Author Info

  • Damien Besancenot
  • Kim Huynh
  • Radu Vranceanu

Abstract

This paper analyses the risk of default on public debt within a repeated game between the governement and private investors. The government has only an imperfect control over the stream of future revenues. In this case, a long sequence of adverse budgetary shocks may push the debt over its sustainable level, defined as the discounted flow of future primary surpluses. Given this small risk of unsustainability, we put forward a debt threshold above which investors refuse to subscribe to a new debt issue. But this shortage of liquidity suffices to bring about default. Hence, this « illiquidity » threshold becomes the new critical threshold. The series of decreasing critical illiquidity thresholds converges to a limit value. This risk-free debt level may be much lower than the sustainable level. Policy implications call for a more restrictive definition of a sound fiscal stance.Classification JEL : E62, F34, H63

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cairn.info/load_pdf.php?ID_ARTICLE=RECO_544_0773
Download Restriction: free

File URL: http://www.cairn.info/revue-economique-2003-4-page-773.htm
Download Restriction: free

Bibliographic Info

Article provided by Presses de Sciences-Po in its journal Revue économique.

Volume (Year): 54 (2003)
Issue (Month): 4 ()
Pages: 773-784

as in new window
Handle: RePEc:cai:recosp:reco_544_0773

Contact details of provider:
Web page: http://www.cairn.info/revue-economique.htm

Related research

Keywords:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Priscilla Bony, 2012. "Efficacité des politiques de sortie de crise dans la zone euro : l'exemple français," Post-Print dumas-00834841, HAL.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cai:recosp:reco_544_0773. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.