Abstract
ABSTRACT This study aims to investigate how different policy shocks help erode public debt ratios across a large sample of developing countries. Using Jordas (2005) local projection model, the study’s findings show a one percent shock to policy variables indeed erodes the public debt ratio; the effects, however, largely depend on appropriate timing and design of policy shock. In addition, expenditure-led policies tend to be more powerful as compared to revenue-based measures in eroding the public debt ratios. The study’s key policy suggestion is to prioritize gradual implementation of policy options in eroding the debt ratios over the medium-term.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: Macroeconomics and Finance in Emerging Market Economies
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.