Government borrowing cost and balance sheets: do assets matter?
Government net worth – total assets less liabilities – has declined considerably relative to national income in a number of OECD countries in recent decades, including the United States, the United Kingdom, Japan and Germany. Notably, however, in thinking about the links betwee...
| Päätekijä: | |
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| Aineistotyyppi: | Working paper |
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University of Oxford
2018
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| _version_ | 1826295149569769472 |
|---|---|
| author | Peppel-Srebrny, J |
| author_facet | Peppel-Srebrny, J |
| author_sort | Peppel-Srebrny, J |
| collection | OXFORD |
| description | Government net worth – total assets less liabilities – has declined considerably relative to national income in a number of OECD countries in recent decades, including the United States, the United Kingdom, Japan and Germany. Notably, however, in thinking about the links between fiscal policy and bond markets, the focus of policy and academic debates has tended to be on the liabilities side of the government balance sheet. Typically, not much attention has been paid to the extent to which any increase in government debt is accompanied by government asset accumulation and hence affects government net worth. Using novel data on both sides of the government balance sheet both for a panel of OECD countries in recent decades and for the United States over the long term, we provide panel data and time series-based evidence that for bond markets, not all government debt is created equal: for explaining government borrowing cost empirically, (i) government assets are significant in addition to government liabilities, and (ii) it is government net worth rather than government liabilities that matters when both are included. The central country-specific fiscal factor driving bond yields hence appears to be government net worth. |
| first_indexed | 2024-03-07T03:56:35Z |
| format | Working paper |
| id | oxford-uuid:c31659e5-54b9-4caf-9ff4-7357e857f3ad |
| institution | University of Oxford |
| last_indexed | 2024-03-07T03:56:35Z |
| publishDate | 2018 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:c31659e5-54b9-4caf-9ff4-7357e857f3ad2022-03-27T06:13:53ZGovernment borrowing cost and balance sheets: do assets matter?Working paperhttp://purl.org/coar/resource_type/c_8042uuid:c31659e5-54b9-4caf-9ff4-7357e857f3adBulk import via SwordSymplectic ElementsUniversity of Oxford2018Peppel-Srebrny, JGovernment net worth – total assets less liabilities – has declined considerably relative to national income in a number of OECD countries in recent decades, including the United States, the United Kingdom, Japan and Germany. Notably, however, in thinking about the links between fiscal policy and bond markets, the focus of policy and academic debates has tended to be on the liabilities side of the government balance sheet. Typically, not much attention has been paid to the extent to which any increase in government debt is accompanied by government asset accumulation and hence affects government net worth. Using novel data on both sides of the government balance sheet both for a panel of OECD countries in recent decades and for the United States over the long term, we provide panel data and time series-based evidence that for bond markets, not all government debt is created equal: for explaining government borrowing cost empirically, (i) government assets are significant in addition to government liabilities, and (ii) it is government net worth rather than government liabilities that matters when both are included. The central country-specific fiscal factor driving bond yields hence appears to be government net worth. |
| spellingShingle | Peppel-Srebrny, J Government borrowing cost and balance sheets: do assets matter? |
| title | Government borrowing cost and balance sheets: do assets matter? |
| title_full | Government borrowing cost and balance sheets: do assets matter? |
| title_fullStr | Government borrowing cost and balance sheets: do assets matter? |
| title_full_unstemmed | Government borrowing cost and balance sheets: do assets matter? |
| title_short | Government borrowing cost and balance sheets: do assets matter? |
| title_sort | government borrowing cost and balance sheets do assets matter |
| work_keys_str_mv | AT peppelsrebrnyj governmentborrowingcostandbalancesheetsdoassetsmatter |