Speaker

Event date

Venue

Abstract

Most advanced nations today are witnessing a peacetime public debt surge that match post World War levels. This raises concerns about fiscal financing and liquidation of the stock of debt especially in the face of changing demographics. United Kingdom being one of the advanced nations with a high level of public debt and an aging population is facing similar issues of fiscal financing. This paper attempts to decompose the evolution in the debt-to-GDP ratio of UK between 1984-2009 into nominal returns, inflation, GDP growth rate, primary deficit and the maturity structure of the debt. The results of the decomposition show that the government of UK inflated away part of the debt but most of the adjustments were due to low interest rates and changes in the primary deficit.

Contact email