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To Establish Sustainability of Government Deficits: Methodology and Application

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Author Info
Takero Doi (Ministry of Finance Japan)

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Abstract

The purpose of this paper is to survey methodology of test for fiscal sustainability. The econometrical tests for fiscal sustainability have been improved since the 1980s. We introduce the methods and backgrounds of these tests. Also we apply the tests to the Indonesian and Japanese data. It is important to analyze the sustainability of government bonds consisting with the fiscal system, particularly intergovernmental relationship. Namely, we should investigate debt sustainability of the consolidated government including not only the central government but also local governments and other (off-budget) account of the central government. In the second half of this paper, we explain the Japanese fiscal policy from the viewpoint of the sustainability problem of government bond policy.

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File URL: http://www.eaber.org/intranet/documents/39/476/MOF_Doi_04_3.pdf
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Publisher Info
Paper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 476.

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Length: 38 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:eab:macroe:476

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Related research
Keywords: Japan; Indonesia; government bonds; debt sustainability; fiscal policy;

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Find related papers by JEL classification:
O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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