Sustainability of Public Debt in the United States and Japan

24 Pages Posted: 1 Nov 2014

See all articles by William R. Cline

William R. Cline

Peterson Institute for International Economics

Date Written: October 1, 2014

Abstract

This paper applies the probabilistic debt sustainability model developed for the euro area in Cline (2012, 2014) to sovereign debt in the United States and Japan. The results indicate that to avoid further increases in the expected ratio of public debt to GDP over the next decade, average annual primary deficits will need to be reduced by about 0.75 percent of GDP in the United States and by about 3 percent of GDP in Japan from the likely baselines as of mid-2014.

Keywords: Public Debt, United States, Japan, Debt Sustainability, Deficits

JEL Classification: E62, H63, H68

Suggested Citation

Cline, William R., Sustainability of Public Debt in the United States and Japan (October 1, 2014). Peterson Institute for International Economics Working Paper No. 14-9, Available at SSRN: https://ssrn.com/abstract=2516991 or http://dx.doi.org/10.2139/ssrn.2516991

William R. Cline (Contact Author)

Peterson Institute for International Economics ( email )

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United States
202-454-1320 (Phone)

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