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Fiscal limits and sovereign default risk in Japan

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  • Matsuoka, Hideaki

Abstract

It is widely known that Japan has the highest debt-to-GDP ratio among OECD countries. If Japan’s national debt continues to balloon, fiscal crisis may occur in the future. This paper develops a closed economy model with defaultable government debt and conducts a simulation to investigate future sovereign debt risk.

Suggested Citation

  • Matsuoka, Hideaki, 2015. "Fiscal limits and sovereign default risk in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 13-30.
  • Handle: RePEc:eee:jjieco:v:38:y:2015:i:c:p:13-30
    DOI: 10.1016/j.jjie.2015.05.003
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    References listed on IDEAS

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    More about this item

    Keywords

    The distribution of fiscal limits; Sovereign risk premium;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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