IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-20-00559.html

Assessing sovereign debt sustainability using a wealth-based fiscal indicator

Author

Listed:
  • Paolo Canofari

    (Polytechnic University of Marche)

  • Alessandro Piergallini

    (University of Rome Tor Vergata)

  • Giovanni Piersanti

    (University of Teramo)

Abstract

Working in the context of an endogenous growth model with the public sector, we show that forward-looking agents' optimizing behavior typically gives rise to a wealth-based, rather than to an output-based, sustainability index of government policy. New insights emerge from calibrating the index to European countries along with the U.S. and Japan as reference countries.

Suggested Citation

  • Paolo Canofari & Alessandro Piergallini & Giovanni Piersanti, 2020. "Assessing sovereign debt sustainability using a wealth-based fiscal indicator," Economics Bulletin, AccessEcon, vol. 40(4), pages 2677-2688.
    • Handle: RePEc:ebl:ecbull:eb-20-00559
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I4-P234.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:spo:wpmain:info:hdl:2441/4vsqk7docb9nmophtp29pk68cr is not listed on IDEAS
    2. Aizenman, Joshua & Jinjarak, Yothin, 2010. "De facto Fiscal Space and Fiscal Stimulus: Definition and Assessment," Santa Cruz Department of Economics, Working Paper Series qt6dn0n13t, Department of Economics, UC Santa Cruz.
    3. Joseph E. Stiglitz, 2016. "The Measurement of Wealth: Recessions, Sustainability and Inequality," International Economic Association Series, in: Joseph E. Stiglitz & Martin Guzman (ed.), Contemporary Issues in Macroeconomics, chapter 7, pages 63-76, Palgrave Macmillan.
    4. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1255-1310.
    5. repec:hal:pseose:halshs-01109372 is not listed on IDEAS
    6. Joseph E. Stiglitz & Martin Guzman (ed.), 2016. "Contemporary Issues in Macroeconomics," International Economic Association Series, Palgrave Macmillan, number 978-1-137-52958-9, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Ricardo Ferraz, 2023. "Testing the Sustainability of Fiscal Policy during the Portuguese First Republic Using Stationary and Cointegration Tests," Economies, MDPI, vol. 11(11), pages 1-15, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bonnet, Odran & Chapelle, Guillaume & Trannoy, Alain & Wasmer, Etienne, 2021. "Land is back, it should be taxed, it can be taxed," European Economic Review, Elsevier, vol. 134(C).
    2. repec:spo:wpmain:info:hdl:2441/56k383m9o9kpb1g6f8rvv74ok is not listed on IDEAS
    3. Tonia NOVITZ, 2020. "Engagement with sustainability at the International Labour Organization and wider implications for collective worker voice," International Labour Review, International Labour Organization, vol. 159(4), pages 463-482, December.
    4. Eggertsson, Gauti B. & Robbins, Jacob A. & Wold, Ella Getz, 2021. "Kaldor and Piketty’s facts: The rise of monopoly power in the United States," Journal of Monetary Economics, Elsevier, vol. 124(S), pages 19-38.
    5. repec:spo:wpmain:info:hdl:2441/1eob9f9aas9q18hfjsiqhggvi2 is not listed on IDEAS
    6. Odran Bonnet & Guillaume Flamerie de la Chapelle & Alain Trannoy & Etienne Wasmer, 2019. "Secular trends in Wealth and Heterogeneous Capital: Land is back...and should be taxed," SciencePo Working papers hal-03541411, HAL.
    7. Joseph E. Stiglitz, 2016. "The Theory of Credit and Macro-economic Stability," NBER Working Papers 22837, National Bureau of Economic Research, Inc.
    8. repec:spo:wpecon:info:hdl:2441/1eob9f9aas9q18hfjsiqhggvi2 is not listed on IDEAS
    9. Bournakis, Ioannis & Ramirez-Rondan, Nelson R., 2022. "Does uncertainty matter for the fiscal consolidation and capital intensity nexus?," MPRA Paper 111592, University Library of Munich, Germany.
    10. Odran Bonnet & Guillaume Flamerie de La Chapelle & Alain Trannoy & Etienne Wasmer, 2019. "Secular Trends in Wealth and Heterogeneous Capital: Land is Back... and Should Be Taxed," Working Papers hal-03570837, HAL.
    11. Bournakis Ioannis & Ramírez-Rondán Nelson R., 2024. "Does Uncertainty Matter for the Fiscal Consolidation and Investment Nexus?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 24(1), pages 529-559, January.
    12. Odran Bonnet, 2018. "Individual housing choices and aggregate housing prices: discrete choice models revisited with matching models," Sciences Po publications info:hdl:2441/3bhpicpe2q8, Sciences Po.
    13. Rana Sajedi & Gregory Thwaites, 2016. "Why Are Real Interest Rates So Low? The Role of the Relative Price of Investment Goods," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(4), pages 635-659, November.
    14. Peppel-Srebrny, Jemima, 2021. "Not all government budget deficits are created equal: Evidence from advanced economies' sovereign bond markets," Journal of International Money and Finance, Elsevier, vol. 118(C).
    15. Paul, Saumik, 2019. "A Decline in Labor's Share with Capital Accumulation and Complementary Factor Inputs: An Application of the Morishima Elasticity of Substitution," IZA Discussion Papers 12219, IZA Network @ LISER.
    16. Grossmann, Volker & Larin, Benjamin & Löfflad, Hans Torben & Steger, Thomas, 2021. "Distributional consequences of surging housing rents," Journal of Economic Theory, Elsevier, vol. 196(C).
    17. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2016. "Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014)," World Inequality Lab Working Papers halshs-02794339, HAL.
    18. Kyoji Fukao & Cristiano Perugini, 2021. "The Long‐Run Dynamics of the Labor Share in Japan," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 445-480, June.
    19. David Hémous & Morten Olsen, 2022. "The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 179-223, January.
    20. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    21. Block, Joern H. & Hirschmann, Mirko & Kranz, Tobias & Neuenkirch, Matthias, 2023. "Public family firms and economic inequality across societies," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    22. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.
    23. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H6 - Public Economics - - National Budget, Deficit, and Debt

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-20-00559. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.