New York Times
The Global Outlook for Government Debt over the Next 25 Years: Implications for the Economy and Public Policy: Policy Analyses in International Economics 94by Joseph E. Gagnon
This study addresses a fundamentally new feature or the contemporary world economy: the simultaneous buildup of very large public deficits and debt positions in virtually all of the advanced countries. The recent global financial crisis sharply accelerated this fiscal deterioration, but it was already well underway in some countries, including the United States
This study addresses a fundamentally new feature or the contemporary world economy: the simultaneous buildup of very large public deficits and debt positions in virtually all of the advanced countries. The recent global financial crisis sharply accelerated this fiscal deterioration, but it was already well underway in some countries, including the United States, where demographic prospects have posed extremely worrisome trajectories for a number of years.
The book has three basic objectives. First, it projects the global fiscal outlook to 2035. Second, it asks whether the combination of deficits and debt in a large number of countries at the same time produces an impact on the world economy that is qualitatively different from the more traditional emergence of such problems in one or a few countries in any given period. Third, it analyzes the effects of the fiscal prospects on key economic variables including global interest rates.
The analysis finds that the current public debt profiles in most advanced economies will grow to dangerous and unsustainable levels over the next couple of decades unless major changes are made in projected spending and revenue levels. The authors conclude that the United States and Japan, in particular, need to start planning now for significant future budget cuts to minimize the risk of a crisis. Acting soon enables the adjustment to be phased in over an extended period, which cushions the inevitable adjustment costs, while avoiding the potentially enormous pressures that could be levied by markets if correction is delayed too long.
New York Times
Meet the Author
Joseph E. Gagnon, senior fellow since September 2009, was visiting associate director, Division of Monetary Affairs (2008-09) at the US Federal Reserve Board. Previously he served at the US Federal Reserve Board as associate director, Division of International Finance (1999-2008), and senior economist (1987-1990 and 1991-97). He has also served at the US Treasury Department (1994-95 and 1997-1999) and has taught at the University of California's Haas School of Business (1990-91). He is author of Flexible Exchange Rates for a Stable World Economy (2011) and The Global Outlook for Government Debt over the Next 25 years: Implications for the Economy and Public Policy (2011). He has published numerous articles in economics journals, including the Journal of International Economics, the Journal of Monetary Economics, the Review of International Economics, and the Journal of International Money and Finance, and has contributed to several edited volumes. He received a BA from Harvard University in 1981 and a PhD in economics from Stanford University in 1987.
Marc Hinterschweiger has been a research analyst with the Peterson Institute since 2008. He is also a PhD candidate in economics at Ludwig-Maximilians University (LMU) in Munich, Germany. His research focuses on the transmission mechanism of monetary policy, asset prices, and financial crises. He previously worked at the Rhenish-Westfalian Institute for Economic Research (RWI) in Essen, Germany. He holds a BA in economics (2005) and a BA in international affairs (2006) from the University of St.Gallen, Switzerland. He earned a master's degree in public policy from Harvard University's Kennedy School of Government (2008), where he was a McCloy scholar, specializing in international trade and finance. He has been a member of the German National Academic Foundation (Studienstiftung des deutschen Volkes) since 2002.
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