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Europos ekonomikos naujienos

Who holds sovereign debt and why it matters

admin11 spalio, 2024020 mins

The ability to issue debt is an important instrument at the government’s disposal. Sovereign borrowing can help buffer the economy from the impact of adverse macroeconomic shocks, but can also make a country vulnerable to financial distress. The sharp increase in fiscal expenditures and debt issuance during the pandemic period, as well as concerns from…

Europos ekonomikos naujienos

Growth stabilises debt and reduces fiscal inflation: A new perspective on monetary-fiscal interactions

admin13 rugsėjo, 2024019 mins

Central banks and governments are responsible for keeping prices and sovereign debt levels stable, respectively. Economists have developed models to understand how these requirements can be fulfilled by managing interest rates, taxes, and public spending. The recent rise in sovereign debt across the world has raised questions about debt sustainability (e.g. Taylor et al. 2022),…