Public debt/Related Articles

Glossary

(for terms not defined below, see the economics glossary [1])

• Automatic stabilisers [r]: the tendency in times of falling economic activity for the government spending to rise, and for tax receipts to fall - and the reverse tendency in times of rising economic activity ^[e]
• Budget deficit [r]: the excess of a government's expenditures over its receipts. See also cyclically-adjusted budget deficit ^[e]
•  CDS - see Credit default swap.
• CDS spread [r]: the annual percentage charge for a credit default swap ^[e]
• Credit default swap [r]: An insurance agreement that guarantees protection against a bond default in return for a fee. ^[e]
• Crowding out [r]: A fall in private sector investment resulting from an increase in government borrowing. ^[e]
• Debt trap [r]: the situation in which the national debt continues to grow faster than national income so that more and more of the government’s budget has to be devoted to interest payments. ^[e]
• Fiscal adjustment [r]: The change in the primary budget balance required to meet a specified criterion (usually a requirement to return to fiscal sustainability). ^[e]
• Fiscal stimulus [r]: a reduction in taxation for the purpose of raising economic output, or an increase in government spending for that purpose. ^[e]
• Fiscal gap [r]: the size of the primary budget surplus (expressed as a percent of GDP) that is required to achieve fiscal sustainability by immediate compliance with the requirement that the national debt be maintained at or below its existing percentage of GDP. ^[e]
• Fiscal sustainability [r]: A government's continuing ability to service its debt without unrealistically large future corrections to its balance of income and expenditure. ^[e]
• Generational accounts [r]: accounts that are constructed by extrapolating current policies through the lifetimes of all people currently alive, and by calculating the net taxes they would pay under those policies. The results are sensitive to the method of extrapolation. ^[e]
• Monetisation (of public debt) [r]: A government's sale of its own securities to the country's central bank in order to obtain funds that are used to redeem its public debt - resulting in an expansion of the bank's monetary base, and consequently of the country's money supply. ^[e]
• Money supply [r]: the economy's stock of those assets that can be quickly exchanged for goods and services. ^[e]
• Panic (banking) [r]: A fear of default that creates a generalised reluctance to grant credit. ^[e]
• Primary budget deficit [r]: the budget deficit excluding payments of interest on the national debt. ^[e]
• Ricardian equivalence [r]: the argument that government spending will not increase demand because it will prompt taxpayers to save an equivalent amount in anticipation of a resulting tax increase. ^[e]
• Sovereign default [r]: The failure of a government to comply with its interest payment or debt repayment obligations. ^[e]