Fiscal Discipline and the Cost of Public Debt Service
AbstractIs there any systematic explanation of variations in the cost of debt servicing over time and across countries? This paper examines the influence of fiscal variables on borrowing costs in a panel of OECD countries, showing that these variables have a significant role. In particular, an improvement of the primary fiscal balance is associated with a significant reduction in debt-servicing costs, amplifying the effects of primary adjustment on the fiscal position. A significant country-specific component remains, however; several explanations for this component are discussed, including debt management and market infrastructure.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 98/55.
Date of creation: 01 Apr 1998
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- Vratislav Izák, 2009. "Primary balance, public debt and fiscal variables in postsocialist members of the european union," Prague Economic Papers, University of Economics, Prague, vol. 2009(2), pages 114-130.
- Vratislav Izák, 2004. "Public Debt Service, Interest Rates and Fiscal Variables in Transition Countries," Prague Economic Papers, University of Economics, Prague, vol. 2004(1), pages 3-15.
- Jeff Huther, 1999. "An Integrated Approach to Government Financial Policy," Treasury Working Paper Series 99/08, New Zealand Treasury.
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