Private Ownership and the Cost of Public Debt: Evidence from the Bond Market

2019 ◽  
Vol 65 (1) ◽  
pp. 301-326
Author(s):  
Brad A. Badertscher ◽  
Dan Givoly ◽  
Sharon P. Katz ◽  
Hanna Lee
Keyword(s):  
Public Debt ◽  
Bond Market ◽  
Private Ownership ◽  
The Cost

Funding Pensions in Scotland: Would Independence Matter?

2014 ◽  
Vol 227 ◽  
pp. R21-R31
Author(s):  
David Bell ◽  
David Comerford ◽  
David Eiser
Keyword(s):  
Public Debt ◽  
Government Debt ◽  
Bond Market ◽  
Liquidity Premium ◽  
Mortality Experience ◽  
Mortality Risks ◽  
Economic Issues ◽  
Scottish Government ◽  
The Uk ◽  
The Cost

Economic issues will be key determinants of the outcome of the Scottish referendum on independence. Pensions are a key element of the economic case for or against independence. The costs of funding pensions in an independent Scotland would be influenced by mortality risks, the costs of borrowing and the segmentation of costs and risks (i.e. pricing to Scotland's experience rather than pooled across UK experience). We compare the overall costs of providing pensions in an independent Scotland against the resources that are available to cover these costs. Scotland has worse mortality experience than the UK as a whole, and Scottish government debt is likely to attract a liquidity premium relative to UK government debt. An independent Scottish government would have to create a bond market for public debt. The liquidity premium would make pensions cheaper to buy, but taxpayers or the consumers of public services would have to pay the cost.

Private Ownership and the Cost of Debt: Evidence from the Bond Market

2015 ◽  
Author(s):  
Brad Badertscher ◽  
Dan Givoly ◽  
Sharon P. Katz ◽  
Hanna Lee
Keyword(s):  
Bond Market ◽  
Cost Of Debt ◽  
Private Ownership ◽  
The Cost

PROSPECTS FOR THE DEVELOPMENT OF THE OVDP MARKET IN UKRAINE AS AN ALTERNATIVES TO EXTERNAL BORROWING

2017 ◽  
Author(s):  
Oleksandra Vіvchar ◽  
◽  
Solomiia Papirnyk ◽  
Keyword(s):  
Public Debt ◽  
Bond Market ◽  
Debt Management ◽  
Securities Market ◽  
Government Bond ◽  
Government Bonds ◽  
The Public ◽  
Long Run ◽  
External Borrowing ◽  
Domestic Economies

The article provides an applied analysis of Ukraine's public debt, in particular in the context of the feasibility of optimizing its structure. The comparison of internal and external borrowings is made, the main shortcomings and advantages of each of these ways of mobilization of financial resources are revealed. Given the hypothesis of the need to increase domestic public debt compared to external, special attention is paid to the study of the main financial instrument through which the state raises funds in the domestic market - domestic government bonds of Ukraine. The dynamics of data volumes of debt securities with an emphasis on crisis periods in both the world and domestic economies was also studied. In addition, the structure of domestic government bonds of Ukraine in circulation was considered on the basis of the owner. This made it possible to identify the main players in the domestic government bond market, as well as the motives that motivate them to increase their own portfolio of domestic government bonds of Ukraine. In order to determine the prospects for increasing the volume of output of these instruments of the Ukrainian stock market, their comparative analysis with alternative types of investments. Particular attention in this aspect is paid to the comparison of IGLBs with deposits, which today are considered the simplest, clearest and most proven way to invest money for individuals. An important role in this study is given to the analysis of key problems of the domestic government bond market, which have haunted the domestic economy since the independence of Ukraine. The main successes achieved in recent years by the Public Debt Management Office of Ukraine with the support of representatives of international financial organizations in terms of optimizing the domestic securities market are presented. The main steps that need to be taken for further real transformation of the debt securities market in Ukraine and which in the long run will reduce Ukraine's financial dependence on external creditors, in particular their requirements in the political and economic arena, are also outlined.

Management Earnings Forecasts and the Cost of Debt

2019 ◽  
pp. 0148558X1988731
Author(s):  
Norio Kitagawa ◽  
Akinobu Shuto
Keyword(s):  
Default Risk ◽  
Lower Cost ◽  
Earnings Forecasts ◽  
Bond Market ◽  
Cost Of Debt ◽  
Yield Spread ◽  
Management Earnings Forecasts ◽  
Bond Yield ◽  
Earnings Benchmarks ◽  
The Cost

Prior studies have indicated that earnings are useful for bond market investors and that beating earnings benchmarks is related to a firm’s lower cost of debt. This study examines whether management earnings forecasts are related to a firm’s cost of debt. Our results indicate that (a) positive forecast innovations (i.e., forecasted increases in earnings) are related to a firm’s lower bond yield spread after controlling for the effect of other earnings benchmarks and (b) the negative association between positive forecast innovations and bond yield spread is weaker for firms with high default risk than for those with low default risk. The results suggest that management earnings forecasts are useful for investors in the Japanese bond market and are consistent with the findings in the equity market. However, the usefulness of management earnings forecasts in the bond market depends on a firm’s level of default risk. Our results suggest that bond investors discount the management earnings forecasts of firms with high default risk because such forecasts are more likely to have an optimistic bias.

The Optimal Level of Debt in an OLG Model with Endogenous Fertility

2011 ◽  
Vol 12 (3) ◽  
pp. 351-369 ◽  
Author(s):  
Luca Spataro ◽  
Luciano Fanti
Keyword(s):  
Public Debt ◽  
Optimal Level ◽  
Child Rearing ◽  
Olg Model ◽  
Endogenous Fertility ◽  
Ceteris Paribus ◽  
Long Run ◽  
The Interest Rate ◽  
The One ◽  
The Cost

Abstract In the present work we extend Diamond’s OLG model by allowing for endogenous fertility and look at the consequences of such an extension on the rules for optimal public debt issuing. In particular, we show that the condition according to which the rate of growth of population should be higher than the interest rate is no longer sufficient for obtaining welfare improvements via debt increases and that the level of optimal debt is, ceteris paribus, lower than the one arising with exogenous fertility. Finally, a sensitivity analysis shows that the optimal level of debt is higher the lower the capital share, the higher individuals’ degree of patience, the bigger the child-rearing cost and the lower the preference for children. On policy grounds we argue that debt-tightening policies may be optimal in the long run provided that the cost of rearing children does not increase (or, if anything, does decrease).

scholarly journals Evolution of Public Debt in Albania during 1990-2017 and its impact on the Economic Growth

2020 ◽  
Vol 4 (1) ◽  
pp. 59
Author(s):  
Amarda Cano
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Cost Of Debt ◽  
Specific Level ◽  
The Public ◽  
Macroeconomic Indicators ◽  
Level Of Economic Development ◽  
Second Tier ◽  
The Cost ◽  
The Empirical Analysis

Public debt is one of the most important macroeconomic indicators due to its impact on the economy of each country. Literature suggests that the effect varies in each country depending on the level of economic development and situation. Public debt will have a direct impact on a country's economic growth, but there are contrasting opinions amongst economists regarding the use of public debt, particularly in situations of distress and in developing countries. Albania is a country that would be in need of a decrease of the debt/GDP ratio. This can be done through a stimulation of the economy rather than a decrease of the public debt. The empirical analysis shows that the increase on real public debt can negatively influence the GDP, yet, we do not observe a specific level above which the effects worsened. Instead, we notie that whenever the public debt was increasing, the cost of debt would sometimes decrease because the governments substitutes the debt borrowed from second tier banks with debt borrowed from the IMF.

scholarly journals Deuda pública en México: dinámica e implicaciones de política

2021 ◽  
Vol 39 (71) ◽  
pp. 22-43
Author(s):  
Oshiel Martínez Chapa ◽  
Jorge Eduardo Salazar Castillo ◽  
Saul Roberto Quispe Aruquipa
Keyword(s):  
Public Debt ◽  
Research Question ◽  
Social Spending ◽  
World Population ◽  
The Public ◽  
Oil Resources ◽  
Public Credit ◽  
Public Resources ◽  
The Cost

The purpose of this paper is to analyze the factors that have driven the public debt in Mexico and its consequences on the economy. The hypothesis proposed is that the increase in debt is related to factors such as discretion in the management of public resources, the guarantee of oil resources, the cost of financial bailouts and the growing social spending exercised. The research question is: How has public debt evolved in the medium and long term, and what are the consequences? The methodology used is qualitative in that it analyzes the facts and documents, and the second is quantitative in that it uses a regression model in which a growth rate of the variable in question is used. The data come from institutions such as the Bank of Mexico, the World Bank, the Ministry of Finance and Public Credit (SHCP), as well as World Population Review. The paper concludes by highlighting the need for governments to adopt responsible policies in order to influence growth and economic development, and not that austerity policies cause low investment and unemployment in the country.

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