Accurate, Focused Research on Law, Technology and Knowledge Discovery Since 2002

You Are Here: Home » Archives: September 2010

Daily Archives: September 1, 2010

IMF: Fiscal Space

by on

Fiscal Space, Prepared by Jonathan D. Ostry, Atish R. Ghosh, Jun I. Kim, and Mahvash S. Qureshi, September 1, 2010, IMF Staff Position Note

  • “The fiscal challenges facing advanced economies are unprecedented, and bring to the fore questions about how to assess fiscal sustainability. Intertemporal solvency—the notion that governments eventually repay their debts—requires only that adjustments to bring debt dynamics back on track occur at some point in the future. Given the sovereign’s right to tax and (not) spend, changes in these variables can always make the problem of insolvency disappear. But markets are not impressed by promises that are unsupported by countries’ track record of adjustment (words unsupported by deeds), and so it is critical to examine this track record to see whether it is indeed consistent with satisfying the intertemporal constraint. In this note, we reexamine the issue of debt sustainability in a large group of advanced economies. Our hypothesis is that, when debt is in a moderate range, its dynamics are sustainable in the sense that increases in debt elicit sufficient increases in primary fiscal balances to stabilize the debt-to-GDP ratio. At high debt levels, however, the dynamics may turn unstable, and the debt ratio may not converge to a finite level. Such a framework allows us to define a “debt limit” that is consistent with the country’s historical track record of adjustment in the sense that, without an extraordinary fiscal effort, any debt increment beyond this limit would cause debt to increase without bound.”
  • Related postings on financial system

    • IMF: Default in Today's Advanced Economies: Unnecessary, Undesirable, and Unlikely

    by on

    Default in Today’s Advanced Economies: Unnecessary, Undesirable, and Unlikely, Carlo Cottarelli, Lorenzo Forni, Jan Gottschalk, and Paolo Mauro, IMF Staff Position Note, September 1, 2010, SPN/10/12 “The state of the public finances has worsened substantially in the main advanced economies as a result of the 2008–09 global financial and economic crisis. For some “peripheral” European… Continue Reading

    August 2010 Manufacturing ISM Report On Business®

    by on

    August 2010 Manufacturing ISM Report On Business® – PMI at 56.3%. New Orders, Production and Employment Growing, Supplier Deliveries Slower, Inventories Growing “Economic activity in the manufacturing sector expanded in August for the 13th consecutive month, and the overall economy grew for the 16th consecutive month, say the nation’s supply executives in the latest Manufacturing… Continue Reading

    New GAO Report – TSA Has Taken Actions to Help Strengthen Security, but Could Improve

    by on

    Pipeline Security: TSA Has Taken Actions to Help Strengthen Security, but Could Improve Priority-Setting and Assessment Processes, GAO-10-867, August 04, 2010 “The United States depends on avast network of pipelines to transport energy. GAO was asked to review the Transportation Security Administration’s (TSA) efforts to help ensure pipeline security. This report addresses the extent to… Continue Reading

    Google Launches Priority Inbox

    by on

    Official Google Blog: “People tell us all the time that they’re getting more and more mail and often feel overwhelmed by it all. We know what you mean—here at Google we run on email. Our inboxes are slammed with hundreds, sometimes thousands of messages a day—mail from colleagues, from lists, about appointments and automated mail… Continue Reading

    DHS – 2009 Yearbook of Immigration Statistics

    by on

    2009 Yearbook of Immigration Statistics, Office of Immigration Statistics, Homeland Security, August 2010 “Statistical data on immigration have been published annually by the U.S. government since the 1890s. Over the years, the federal agencies responsible for reporting on immigration have changed, as have the content, format, and title of the annual publication. Currently, immigration data… Continue Reading

    IMF – Sustainable Real Exchange Rates in the New EU Member States: What did the Great Recession Change?

    by on

    Sustainable Real Exchange Rates in the New EU Member States: What did the Great Recession Change? Jan Babecký, Aleš Bulíř, and Kateřina Šmídková, August 2010 “The Great Recession affected export and import patterns in our sample countries, and these changes, coupled with a more volatile external environment, have profound impact on our estimates of real… Continue Reading