Series: IMF Working Papers
Author(s): Fuad Hasanov , and Reda Cherif
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 September 2012
Keywords: VAR, impulse responses, debt ratio, debt dynamics, primary deficit, National Budget, Deficit, and Debt: General, Multiple or Simultaneous Equation Models: Time-Series Models,
We study how macroeconomic shocks affect U.S. public debt dynamics using a VAR with debt feedback. Following a fiscal austerity shock, the debt ratio initially declines and then returns to its pre-shock path. Yet,...