Réduction du ratio de dette publique : quels instruments pour quels effets ?

In the wake of the economic crisis in 2007-2008, european sovereign debt showed a large increase.As a consequence, the possibility of starting a stabilization or a reduction of public debt ratio hasbecome a critical issue for the coming years to restore fiscal sustainability and to ensure compliancewith the european treaties. Against this background, the identification of the most appropriatepolicies to reduce public debt ratio represents a major economic issue, especially in times of loweconomic growth. The purpose of this article is to assess the ability of different fiscal policies instrumentsto reduce public debt ratio. From a methodological point of view, we estimate, based onFrench data, a non-linear model (Threshold VAR) including the main determinants of public debtratio : public spending, tax revenues, GDP and price index. The threshold VAR model allows usto distinguish economic expansion from economic recession and therefore to take into account thevariability of the multipliers over time. We couple the TVAR model with the public debt accountingequation in order to "transfer" the effect of a shock from a endogeneous variable to public debtratio. We then show that a cut in public spending can result in an increase in the public debtratio in the short term, moreover this effect is significantly higher in recession times. Inversely, anincrease in tax revenues lead to a decrease in the public debt ratio, in the short term, whatever theconsidered regime.