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The Us Federal Debt Outlook: Reading the Tea Leaves

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  • Oya Celasun
  • Geoffrey N. Keim

Abstract

We show that fiscal policies reflecting a primary balance response to higher debt in line with historic experience would significantly increase the likelihood of reaching the debt targets of the U.S. administration in the medium term. Deficits and debt are higher under current budgetary proposals and IMF projections for real activity and interest rates, which do not include a reaction of policies to rising primary deficits. Under the IMF staff's current economic projections, a primary fiscal adjustment of about 3.5 percent of GDP would be needed to achieve a debt level of about 70 percent of GDP in 2020.

Suggested Citation

  • Oya Celasun & Geoffrey N. Keim, 2010. "The Us Federal Debt Outlook: Reading the Tea Leaves," IMF Working Papers 2010/062, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2010/062
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    Citations

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    Cited by:

    1. Corbet, Shaen & Larkin, Charles, 2017. "Has the uniformity of banking regulation within the European Union restricted rather than encouraged sectoral development?," International Review of Financial Analysis, Elsevier, vol. 53(C), pages 48-65.
    2. Beck, T.H.L. & Todorov, R.I. & Wagner, W.B., 2011. "Bank Supervision Going Global? A Cost-Benefit Analysis (Replaced by CentER DP 2012-059)," Discussion Paper 2011-127, Tilburg University, Center for Economic Research.
    3. Rughoo, Aarti & Sarantis, Nicholas, 2014. "The global financial crisis and integration in European retail banking," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 28-41.
    4. Beck, T.H.L. & Todorov, R.I. & Wagner, W.B., 2012. "Supervising Cross-Border Banks : Theory, Evidence and Policy (Revised version of EBC Discussion Paper 2011-033)," Other publications TiSEM dfd16cc4-fe7a-4c89-997f-6, Tilburg University, School of Economics and Management.
    5. Egorova, Olga (Егорова, Ольга) & Kadoshnikova, M.E. (Кадошникова, М.Е.), 2016. "Basic Principles of Crisis Management and Crisis Management Mechanisms and Oversight [Основные Принципы Антикризисного Управления И Механизмы Антикризисного Регулирования И Надзора]," Working Papers 2047, Russian Presidential Academy of National Economy and Public Administration.
    6. Beck, T.H.L. & Todorov, R.I. & Wagner, W.B., 2012. "Supervising Cross-Border Banks : Theory, Evidence and Policy (Revised version of CentER Discussion Paper 2011-127)," Other publications TiSEM 1aedf83e-1ca5-44b5-bc6d-d, Tilburg University, School of Economics and Management.
    7. Nicolas Veron, 2013. "A Realistic Bridge Towards European Banking Union," Policy Briefs PB13-17, Peterson Institute for International Economics.
    8. David Cronin & Kevin Dowd, 2013. "Fiscal Fan Charts: A Tool for Assessing Member States' (Likely?) Compliance with EU Fiscal Rules," Fiscal Studies, Institute for Fiscal Studies, vol. 34, pages 517-534, December.
    9. Reda Cherif & Fuad Hasanov, 2018. "Public debt dynamics: the effects of austerity, inflation, and growth shocks," Empirical Economics, Springer, vol. 54(3), pages 1087-1105, May.
    10. Reda, Cherif & Fuad, Hasanov, 2010. "Public Debt Dynamics and Debt Feedback," MPRA Paper 27918, University Library of Munich, Germany.
    11. Nicolas Véron & Morris Goldstein, 2011. "Too big to fail- the transatlantic debate," Working Papers 495, Bruegel.
    12. Goodhart, C. A. E., 2010. "The Changing Role of Central Banks," Working Papers 11-27, University of Pennsylvania, Wharton School, Weiss Center.

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