The Growth in Government Domestic Debt : Changing Burdens and Risks

Hanson, James A.

World Bank, Washington, DC

关键词: ACCOUNTING;    AMORTIZATION;    AMORTIZATIONS;    ASSET HOLDING;    ASSET HOLDINGS;   

DOI  :  10.1596/1813-9450-4348
RP-ID  :  WPS4348

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper analyzes the recent growth ofgovernment domestic debt, including central bank debt, usinga new data base on government domestic debt in developingcountries with large, open financial systems.On average,government domestic debt grew much faster than GDP between1994 and 2004 and became larger than foreign debt. The rapidgrowth of domestic debt reflects financial crises, thegrowth of central bank debt and the greater attractivenessto governments of issuing domestic debt as well as therecent increase in demands for it.Both its attractivenessand the increased demands for it reflect the current benigninternational environment to some degree.The main risk ofgovernment debt, domestic or foreign, remains its overallsize relative to a country's fiscal, financial, andpolitical institutions.While government domestic debt canhelp the domestic private capital market, large domesticdebt, like large external debt, has risks.For example,there can be "sudden stops" in the demand fordomestic debt as well as in foreign lending.Governmentsneed to be aware of the risks and burdens in domestic debtissue-crowding out small borrowers, transferring risks tobanks when issuing longer maturity, fixed-interest domesticdebt and reducing returns, and imposing risks on holders ofpensions, annuities, and life insurance policies. Growth ofcentral bank debt can divert central banks from pursuit ofthe objective of price stability.