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Public Debt Episodes in Irish Economic History 1950-2015

Kenny, Sean LU (2016) In Lund Papers in Economic History: General issues
Abstract
In this paper I study the public debt dynamics of three episodes (the crises of the 1950s, the 1980s and 2010-15) in Ireland’s modern economic history. By using traditional debt dynamic decomposition formulae, I measure the components which contributed most to public debt ratio reduction following previous high debt episodes. I also employ the case of Sweden for comparative purposes, in how it emerged from the increase in public debt in the aftermath of its banking crisis 1991-1993. The key findings which emerge are 1) the reduction of the public ratio following the 1980s episode was predominantly driven by cumulative primary surpluses, though a favourable growth and interest rate differential emerged as the key determinant in the late... (More)
In this paper I study the public debt dynamics of three episodes (the crises of the 1950s, the 1980s and 2010-15) in Ireland’s modern economic history. By using traditional debt dynamic decomposition formulae, I measure the components which contributed most to public debt ratio reduction following previous high debt episodes. I also employ the case of Sweden for comparative purposes, in how it emerged from the increase in public debt in the aftermath of its banking crisis 1991-1993. The key findings which emerge are 1) the reduction of the public ratio following the 1980s episode was predominantly driven by cumulative primary surpluses, though a favourable growth and interest rate differential emerged as the key determinant in the late 1990s. Additionally, public debt in the 1980s was considerably more difficult to service in terms of tax revenues and maturity structures than the current event. 2) Public debt continued to increase following the crisis of the 1950s due to higher interest rates and lower inflation, despite a recovery in growth and fiscal contraction. 3) In line with other research isolating the uniqueness of open economy debt reductions, I find that though Sweden (like Ireland) reduced public debt in an environment of strong international growth, it did so in a macroeconomic environment of higher interest rates and falling inflation, entirely through budget surplus accumulation. (Less)
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Public Debt , Ireland, Public Debt Dynamics , Sweden, Crisis, F34 , H60 , H63 , H69, N00, E62
in
Lund Papers in Economic History: General issues
issue
2016:145
pages
43 pages
publisher
Department of Economic History, Lund University
language
English
LU publication?
yes
id
2eb4c190-581c-4594-a3b9-77013a6d5e26
date added to LUP
2016-04-28 15:04:18
date last changed
2016-06-08 11:11:47
@misc{2eb4c190-581c-4594-a3b9-77013a6d5e26,
  abstract     = {In this paper I study the public debt dynamics of three episodes (the crises of the 1950s, the 1980s and 2010-15) in Ireland’s modern economic history. By using traditional debt dynamic decomposition formulae, I measure the components which contributed most to public debt ratio reduction following previous high debt episodes. I also employ the case of Sweden for comparative purposes, in how it emerged from the increase in public debt in the aftermath of its banking crisis 1991-1993. The key findings which emerge are 1) the reduction of the public ratio following the 1980s episode was predominantly driven by cumulative primary surpluses, though a favourable growth and interest rate differential emerged as the key determinant in the late 1990s. Additionally, public debt in the 1980s was considerably more difficult to service in terms of tax revenues and maturity structures than the current event. 2) Public debt continued to increase following the crisis of the 1950s due to higher interest rates and lower inflation, despite a recovery in growth and fiscal contraction. 3) In line with other research isolating the uniqueness of open economy debt reductions, I find that though Sweden (like Ireland) reduced public debt in an environment of strong international growth, it did so in a macroeconomic environment of higher interest rates and falling inflation, entirely through budget surplus accumulation.},
  author       = {Kenny, Sean},
  keyword      = {Public Debt ,Ireland,Public Debt Dynamics ,Sweden,Crisis,F34 , H60 ,H63 ,H69,N00,E62},
  language     = {eng},
  number       = {2016:145},
  pages        = {43},
  publisher    = {ARRAY(0x960d748)},
  series       = {Lund Papers in Economic History: General issues},
  title        = {Public Debt Episodes in Irish Economic History 1950-2015},
  year         = {2016},
}