Fiscal Sustainability of Japan: A Dynamic Stochastic General Equilibrium Approach

Masaya Sakuragawa, Kaoru Hosono

研究成果: Article査読

16 被引用数 (Scopus)

抄録

The purpose of this paper is to investigate the fiscal sustainability of Japan by applying a dynamic stochastic general equilibrium model to the Japanese economy. By introducing intermediation costs into the model, we succeed in explaining the observed relationship between the interest and GDP growth rates, which is crucial in testing for sustainability. When the projected real growth rate is 2.5%, the average real interest rate becomes 2.57%, and the debt-to-GDP ratio gradually increases stochastically so that government debt is not sustainable. To recover sustainability, the primary surplus must be 0.2% of GDP.

本文言語English
ページ(範囲)517-537
ページ数21
ジャーナルJapanese Economic Review
61
4
DOI
出版ステータスPublished - 2010 12 1

ASJC Scopus subject areas

  • 経済学、計量経済学

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