Fiscal Deficit and Public Debt in Industrial Countries, 1970-1994

Domenico Fanizza and Vito Tanzi

No 1995/049, IMF Working Papers from International Monetary Fund

Abstract: This paper assembles a set of relevant fiscal data, for both the individual countries and for the aggregate G-7 and 18 industrial countries, which covers a period long enough to allow an assessment of trends and the conduct of econometric tests. The “world” fiscal deficit has been rising since the 1970s and reached a historic high in 1993-94; the rise of the deficit has been accompanied by a significant decline in world saving. The paper argues that the increase in public debt, which has been the consequence of the accumulation of the fiscal deficits, has pushed up worldwide interest rates. Econometric evidence in support of this relationship is presented on the basis of panel data for the period 1970-93.

Keywords: WP; deficit; G-7; GDP ratio; countries GPS; debt coefficient; deficit country; percentage of GDP; debt dynamic; Government debt management; Real interest rates; Private savings; Global (search for similar items in EconPapers)
Pages: 38
Date: 1995-05-01
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1995/049

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