How to Stabilize Debt While Running Deficit

Statistics and Economy Journal, 2015, 95 (3)

10 Pages Posted: 25 Feb 2016 Last revised: 12 Jun 2018

Date Written: 2015

Abstract

Main aim of the paper is to discuss the relation between government deficit and debt and the importance of the aggregate known as stock-flow adjustments. The development of Czech government's debt confronted with deficits in the last years gave raise to a number of questions which are dealt with in the following text, mainly the way how debt can be stabilized or even decreased if budget balance ends up regularly in huge deficits. The second task addressed in the text is the case of the net debt concept. Net debt is presented primarily not as alternative to EDP debt, but rather as supplementary indicator making the picture on fiscal situation more complete. In the last part, the characteristics of EDP debt and net debt are discussed; the development of both indicators is then compared using the figures published for the Czech Republic.

Keywords: Government, deficit, debt, stock-flow adjustment

JEL Classification: H10, H62, H63

Suggested Citation

Rybáček, Václav, How to Stabilize Debt While Running Deficit (2015). Statistics and Economy Journal, 2015, 95 (3), Available at SSRN: https://ssrn.com/abstract=2737376

Václav Rybáček (Contact Author)

Czech Statistical Office ( email )

Na padesatem 81
Praha, 10000
Czech Republic

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