Sustainability of Public Debt in the United States and Japan
24 Pages Posted: 1 Nov 2014
Date Written: October 1, 2014
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: Suggested Citation