Public Debt and Fiscal Adjustment Arithmetics

Can countries reduce their public debt without improvement in their current account ? Or can countries reduce at all their public debt in a short time span?

The state of fiscal deficits and public debt in some OECD countries has reached an alarming level. The Eurozone countries, following the example of Germany, are now considering drastic reductions in their fiscal deficits. Governments realize that current levels of fiscal deficits are unsustainable, as fiscal deficits will add more to the public debts which for some countries are already very high. The question is whether OECD countries can reduce fiscal deficit and public debt without jeopardizing their growth prospects? by Anh-Nga Tran-Nguyen

100604_AT_Debt&FiscalAdjustmentsArithmetics.pdf99.29 KB

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