Réduction du ratio de dette publique: quels instruments pour quels effets ?
No 2018-1, EconomiX Working Papers from University of Paris Nanterre, EconomiX
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.
Keywords: Public debt; fiscal consolidation; multipliers; fiscal policy. (search for similar items in EconPapers)
JEL-codes: H63 H68 E61 E62 (search for similar items in EconPapers)
Pages: 38 pages
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2018-1
Access Statistics for this paper
More papers in EconomiX Working Papers from University of Paris Nanterre, EconomiX Contact information at EDIRC.
Bibliographic data for series maintained by Valerie Mignon ().