Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union
Autor(a) principal: | |
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Data de Publicação: | 2024 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/29757 |
Resumo: | Conditions of fiscal sustainability have been widely studied in the literature. Fiscal reaction functions or cointegration between government revenues and expenditures are two approaches that economists have been paying their attention, not only on a theoretical perspective, but also empirically assessing the sustainability of several economies during different timespans. Whereas a predominant focus has been attributed to primary deficits, little attention has been dedicated to government financial assets contribution to government debt paths. Given that government financial assets represent a large proportion of gross debt accumulation, we enquire about their role on government debt leveraging of economic growth over interest rates, focusing on a channel of gross debt, investment, external balance and ratings, in 27 European Union economies during the period from 2000 to 2022. Large heterogeneities in the statistical characteristics of the series and impacts of financial assets on interest rate-growth rate differentials call for a closer attention to financial assets on a granular approach at individual country level, rather than on the aggregate. Our results highlight the importance of government financial assets holdings to the short and long-run debt trajectories, enhancing or potentially undermining gains from primary deficits consolidation efforts and consequently on the differentials between interest rates and output growth. |
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Leveraging interest-growth differentials : hidden effects of government financial assets in the European UnionPublic debtStock Flow AdjustmentsFinancial Assets HoldingsARDLPMGConditions of fiscal sustainability have been widely studied in the literature. Fiscal reaction functions or cointegration between government revenues and expenditures are two approaches that economists have been paying their attention, not only on a theoretical perspective, but also empirically assessing the sustainability of several economies during different timespans. Whereas a predominant focus has been attributed to primary deficits, little attention has been dedicated to government financial assets contribution to government debt paths. Given that government financial assets represent a large proportion of gross debt accumulation, we enquire about their role on government debt leveraging of economic growth over interest rates, focusing on a channel of gross debt, investment, external balance and ratings, in 27 European Union economies during the period from 2000 to 2022. Large heterogeneities in the statistical characteristics of the series and impacts of financial assets on interest rate-growth rate differentials call for a closer attention to financial assets on a granular approach at individual country level, rather than on the aggregate. Our results highlight the importance of government financial assets holdings to the short and long-run debt trajectories, enhancing or potentially undermining gains from primary deficits consolidation efforts and consequently on the differentials between interest rates and output growth.ISEG - REM - Research in Economics and MathematicsRepositório da Universidade de LisboaAlves, JoséWagner, Clarisse2024-01-10T14:32:44Z2024-012024-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/29757engAlves, José e Clarisse Wagner (2024). "Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union". REM Working paper series, nº 0307/20242184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-01-14T01:32:06Zoai:www.repository.utl.pt:10400.5/29757Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T01:40:27.483998Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
title |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
spellingShingle |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union Alves, José Public debt Stock Flow Adjustments Financial Assets Holdings ARDL PMG |
title_short |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
title_full |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
title_fullStr |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
title_full_unstemmed |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
title_sort |
Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union |
author |
Alves, José |
author_facet |
Alves, José Wagner, Clarisse |
author_role |
author |
author2 |
Wagner, Clarisse |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Alves, José Wagner, Clarisse |
dc.subject.por.fl_str_mv |
Public debt Stock Flow Adjustments Financial Assets Holdings ARDL PMG |
topic |
Public debt Stock Flow Adjustments Financial Assets Holdings ARDL PMG |
description |
Conditions of fiscal sustainability have been widely studied in the literature. Fiscal reaction functions or cointegration between government revenues and expenditures are two approaches that economists have been paying their attention, not only on a theoretical perspective, but also empirically assessing the sustainability of several economies during different timespans. Whereas a predominant focus has been attributed to primary deficits, little attention has been dedicated to government financial assets contribution to government debt paths. Given that government financial assets represent a large proportion of gross debt accumulation, we enquire about their role on government debt leveraging of economic growth over interest rates, focusing on a channel of gross debt, investment, external balance and ratings, in 27 European Union economies during the period from 2000 to 2022. Large heterogeneities in the statistical characteristics of the series and impacts of financial assets on interest rate-growth rate differentials call for a closer attention to financial assets on a granular approach at individual country level, rather than on the aggregate. Our results highlight the importance of government financial assets holdings to the short and long-run debt trajectories, enhancing or potentially undermining gains from primary deficits consolidation efforts and consequently on the differentials between interest rates and output growth. |
publishDate |
2024 |
dc.date.none.fl_str_mv |
2024-01-10T14:32:44Z 2024-01 2024-01-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/29757 |
url |
http://hdl.handle.net/10400.5/29757 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Alves, José e Clarisse Wagner (2024). "Leveraging interest-growth differentials : hidden effects of government financial assets in the European Union". REM Working paper series, nº 0307/2024 2184-108X |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
ISEG - REM - Research in Economics and Mathematics |
publisher.none.fl_str_mv |
ISEG - REM - Research in Economics and Mathematics |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799136893506420736 |