Working Paper: NBER ID: w15702
Authors: George J. Hall; Thomas J. Sargent
Abstract: This paper uses the sequence of government budget constraints to motivate estimates of interest payments on the U.S. Federal government debt. We explain why our estimates differ conceptually and quantitatively from those reported by the U.S. government. We use our estimates to account for contributions to the evolution of the debt to GDP ratio made by inflation, growth, and nominal returns paid on debts of different maturities.
Keywords: No keywords provided
JEL Codes: E31; E43; H6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Nominal interest payments (E43) | debt-to-GDP ratio (H68) |
| Inflation (E31) | debt-to-GDP ratio (H68) |
| Growth in real GDP (O49) | debt-to-GDP ratio (H68) |
| Maturity composition of debt (G32) | debt-to-GDP ratio (H68) |
| Variation in returns across maturities (G12) | debt-to-GDP ratio (H68) |