Jump to ContentJump to Main Navigation
Post-crisis Fiscal Policy$
Users without a subscription are not able to see the full content.

Carlo Cottarelli, Philip Gerson, and Abdelhak Senhadji

Print publication date: 2014

Print ISBN-13: 9780262027182

Published to MIT Press Scholarship Online: September 2015

DOI: 10.7551/mitpress/9780262027182.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2017. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use (for details see http://www.mitpress.universitypressscholarship.com/page/privacy-policy).date: 11 December 2017

Determinants of the Primary Fiscal Balance: Evidence from a Panel of Countries

Determinants of the Primary Fiscal Balance: Evidence from a Panel of Countries

Chapter:
(p.67) 4 Determinants of the Primary Fiscal Balance: Evidence from a Panel of Countries
Source:
Post-crisis Fiscal Policy
Author(s):

Li Zeng

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262027182.003.0005

This chapter examines some stylized facts about the primary fiscal balance, a key determinant of public debt dynamics which, together with the level of the public debt stock and the differential between the interest rate on public debt and GDP growth, forms the basis for projecting the future path of a country's public debt. More specifically, the chapter estimates the empirical relationship between the primary fiscal balance and its underlying determinants using both country fixed-effect and dynamic-panel data methods. It provides an illustrative example showing how to apply the empirical findings to predict a country's primary fiscal balance on the basis of economic fundamentals. While achieving a large primary fiscal surplus is not unusual, sustaining it over an extended period is quite uncommon. The chapter shows that real economic growth has a significant positive impact on the primary fiscal balance, and that countries tend to run higher primary fiscal balances when faced with higher debt-to-GDP ratios.

Keywords:   primary fiscal balance, public debt, GDP growth, fiscal surplus, real economic growth, debt-to-GDP ratio

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.