Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia

"In this paper we present an analysis of optimal public debt management and its interaction with debt sustainability, and apply it to Colombia. Optimal public debt management, a difficult and complex issue for emerging market economies, grows more challenging when a country has a large, increas...

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Autores Principales: Arbeláez, María A., Roubini, Nouriel, Guerra, María L.
Publicado: Este informe no ha sido formalmente editado 2016
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Acceso en línea:http://hdl.handle.net/11445/3285
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spelling ir-11445-32852017-06-17T18:13:44Z Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia Arbeláez, María A. Roubini, Nouriel Guerra, María L. Deuda Pública Gastos Públicos Ingresos Públicos Misión del Ingreso Público Política Fiscal Administración Fiscal Tributación Colombia Macroeconomía, Política Monetaria y Fiscal Public Debt Public Expenditure Public Revenues Fiscal Policy "In this paper we present an analysis of optimal public debt management and its interaction with debt sustainability, and apply it to Colombia. Optimal public debt management, a difficult and complex issue for emerging market economies, grows more challenging when a country has a large, increasing, and possibly unsustainable debt path that requires a major primary fiscal adjustment to restore debt sustainability. We survey the analytical literature on optimal public debt management and debt sustainability and financeability and emphasize the aspects that are more relevant for emerging markets with limited economic policy credibility. We then apply the analysis to the case of Colombia. This part first discusses the sustainability of the debt dynamics of the country and provides a primary gap analysis under various scenarios about the fiscal adjustment of the country. Then it provides an overview of the public debt structure and its management in the last decade, considers value at risk scenarios and stress tests for the current structure of the public debt (domestic and external). Finally, it analyzes the issue of optimal debt management by considering a VaR and Debt-at-Risk approach; describing and discussing the reference model used by the policy authorities; and analyzing the challenges faced in the management of the Colombian public debt in the next few years within a context of partial or severe domestic and international market access limitations. Over the next few years the authorities will face a very delicate task of managing the country debt under conditions of limited domestic market access, limited policy credibility, some economic and political/security uncertainty and unfavorable international financial and real market conditions. A sound management of the public debt by type, maturity and currency composition will be essential for the achievement of financial and debt stability." H50 H63 H20 E62 "In this paper we present an analysis of optimal public debt management and its interaction with debt sustainability, and apply it to Colombia. Optimal public debt management, a difficult and complex issue for emerging market economies, grows more challenging when a country has a large, increasing, and possibly unsustainable debt path that requires a major primary fiscal adjustment to restore debt sustainability." (Final Version for Comments) Estudio realizado para la Misión de Ingreso Público 2016-09-15T20:05:33Z 2017-04-18T21:15:58Z 2017-06-17T18:13:44Z 2016-09-15T20:05:33Z 2017-04-18T21:15:58Z 2017-06-17T18:13:44Z 2003-11 Arbeláez, M. A.; Roubini, N. and Guerra, M. L. (2003). Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia. Bogotá: Fedesarrollo, noviembre. Estudio para la Misión del Ingreso Público. http://hdl.handle.net/11445/3285 application/pdf Este informe no ha sido formalmente editado
institution Fedesarrollo
collection DSpace
topic Deuda Pública
Gastos Públicos
Ingresos Públicos
Misión del Ingreso Público
Política Fiscal
Administración Fiscal
Tributación
Colombia
Macroeconomía, Política Monetaria y Fiscal
Public Debt
Public Expenditure
Public Revenues
Fiscal Policy
spellingShingle Deuda Pública
Gastos Públicos
Ingresos Públicos
Misión del Ingreso Público
Política Fiscal
Administración Fiscal
Tributación
Colombia
Macroeconomía, Política Monetaria y Fiscal
Public Debt
Public Expenditure
Public Revenues
Fiscal Policy
Arbeláez, María A.
Roubini, Nouriel
Guerra, María L.
Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia
description "In this paper we present an analysis of optimal public debt management and its interaction with debt sustainability, and apply it to Colombia. Optimal public debt management, a difficult and complex issue for emerging market economies, grows more challenging when a country has a large, increasing, and possibly unsustainable debt path that requires a major primary fiscal adjustment to restore debt sustainability. We survey the analytical literature on optimal public debt management and debt sustainability and financeability and emphasize the aspects that are more relevant for emerging markets with limited economic policy credibility. We then apply the analysis to the case of Colombia. This part first discusses the sustainability of the debt dynamics of the country and provides a primary gap analysis under various scenarios about the fiscal adjustment of the country. Then it provides an overview of the public debt structure and its management in the last decade, considers value at risk scenarios and stress tests for the current structure of the public debt (domestic and external). Finally, it analyzes the issue of optimal debt management by considering a VaR and Debt-at-Risk approach; describing and discussing the reference model used by the policy authorities; and analyzing the challenges faced in the management of the Colombian public debt in the next few years within a context of partial or severe domestic and international market access limitations. Over the next few years the authorities will face a very delicate task of managing the country debt under conditions of limited domestic market access, limited policy credibility, some economic and political/security uncertainty and unfavorable international financial and real market conditions. A sound management of the public debt by type, maturity and currency composition will be essential for the achievement of financial and debt stability."
author Arbeláez, María A.
Roubini, Nouriel
Guerra, María L.
author_facet Arbeláez, María A.
Roubini, Nouriel
Guerra, María L.
author_sort Arbeláez, María A.
title Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia
title_short Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia
title_full Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia
title_fullStr Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia
title_full_unstemmed Interactions between public debt management and debt dynamics and sustainability: theory and application to Colombia
title_sort interactions between public debt management and debt dynamics and sustainability: theory and application to colombia
publisher Este informe no ha sido formalmente editado
publishDate 2016
url http://hdl.handle.net/11445/3285
_version_ 1626720054028533760
score 10,662984