The Unexplained Part of Public Debt
AUTOR
Date
Mar 2006
This paper shows that budget deficits account for a relatively small fraction of debt growth and that stock-flow reconciliation, which is often considered a residual entity, is one of the key determinants of debt dynamics. After having explained the importance of the stock-flow reconciliation, the paper shows that this residual entity can be partly explained by contingent liabilities and balancesheet effects.