A Simple Stochastic Approach to Debt Sustainability Applied to Lebanon
AbstractThis paper applies a simple probabilistic approach to debt sustainability analysis to the case of Lebanon. The paper derives "fan charts" to depict the probability distribution of the government debt to GDP ratio under a medium-term adjustment scenario, as a result of shocks to GDP growth and interest rates. The distribution of shocks is derived from the past shocks to these variables and the related variance covariance. Because we are interested in assessing the sustainability of a particular policy scenario, we do not consider independent fiscal policy shocks or the endogenous policy response to shocks.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 08/97.
Date of creation: 01 Apr 2008
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-21 (All new papers)
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