Assessing sovereign debt sustainability using a wealth-based fiscal indicator

Paolo Canofari, Alessandro Piergallini and Giovanni Piersanti

Economics Bulletin, 2020, vol. 40, issue 4, 2677-2688

Abstract: Working in the context of an endogenous growth model with the public sector, we show that forward-looking agents' optimizing behavior typically gives rise to a wealth-based, rather than to an output-based, sustainability index of government policy. New insights emerge from calibrating the index to European countries along with the U.S. and Japan as reference countries.

Keywords: Endogenous Growth; Sovereign Debt Sustainability; Debt-to-Wealth Ratio; Fiscal Indicators. (search for similar items in EconPapers)
JEL-codes: E6 H6 (search for similar items in EconPapers)
Date: 2020-10-12
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Citations: View citations in EconPapers (1)

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