Conditional solvency analysis of internal and external debts of the state government of Ceará

• Autor(a) principal: Faustino Matos, Paulo Rogério
• Data de Publicação: 2021
• Tipo de documento: Artigo
• Idioma: por
• Título da fonte: Revista Controle (Online)
• Texto Completo: https://revistacontrole.tce.ce.gov.br/index.php/RCDA/article/view/746
• topic: Dívidas Externa e Interna; Governo do Estado do Ceará; Solvência; Superávit Corrente Primário; Reação Fiscal Condicional; Instrumentos Econômicos

This paper proposes a study of the solvency of internal and external debts of the State Government of Ceará, based on the unprecedented application of a fiscal reaction framework with the insertion of macroeconomic controls and the dynamics of the current primary surplus. The relevance of this disaggregation is due to the different temporal behavior between the disaggregated debts and to the fact that the state is the federal entity with the largest relative external indebtedness. The study considers the most current database possible, covering the period between the first two months of 2010 and the second two months of 2021. The evidence is robust to the change in control sets and the change in econometric specifications, considering the non-stationarity of the series. The results suggest that the current primary surplus reacts asymmetrically when internal and external debt increases. Based on the long-term structural and well-founded relationship between the surplus and each of the debts, the external debt is solvent and the internal debt is insolvent. The variation of the external debt is very sensitive to exchange rate fluctuations. Both debts show variations characterized by reversion to the mean. Impulse-response analysis shows that there are consequences on the surplus arising from shocks on the debts that do not dissipate up to 12 bimesters ahead.