Faculty of Economics and Business Administration Publications Database

The unexplained part of public debt

Campos, Camila F.S.
Panizza, Ugo
Volume: 7
Number: 3
Pages: 228 - 243
Month: September
ISSN-Print: 1566-0141
Link External Source: Online Version
Year: 2006
Keywords: Public debt; Deficit; Balance-sheet effects
Abstract: This paper shows that budget deficits account for a relatively small fraction of debt growth and that stock-flow reconciliation, which is often considered a residual entity, is one of the key determinants of debt dynamics. After having explained the importance of the stock-flow reconciliation, the paper shows that this residual entity can be partly explained by contingent liabilities and balance-sheet effects.