Novel Government Debt Indicator: Government Debt to Net Wealth
of Households

D 2015

Novel Government Debt Indicator: Government Debt to Net Wealth of Households

FISCHER, Jakub and Hana LIPOVSKÁ

Basic information

Original name

Novel Government Debt Indicator: Government Debt to Net Wealth of Households

Authors

FISCHER, Jakub (203 Czech Republic, guarantor) and Hana LIPOVSKÁ (203 Czech Republic, belonging to the institution)

Edition

Brno, Current Trends in Public Sector Research - the 19th International Conference, p. 110-116, 7 pp. 2015

Publisher

Masarykova univerzita

Other information

Language

English

Type of outcome

Stať ve sborníku

Field of Study

10103 Statistics and probability

Country of publisher

Czech Republic

Confidentiality degree

není předmětem státního či obchodního tajemství

Publication form

printed version "print"

RIV identification code

RIV/00216224:14560/15:00082290

Organization unit

Faculty of Economics and Administration

ISBN

978-80-210-7532-0

ISSN

UT WoS

000355547600013

Keywords in English

public debt; one-off tax; Net Wealth of Households; Gross Domestic Product; Government Debt/Net Wealth of Households

Abstract

V originále

Government debt is one of the most important variables monitored in the European economies of 21th century. Due to Euro Convergence Criteria, it is most often calculated as a ratio of government debt-to-Gross Domestic Product (D/GDP). However, this ratio does not have clear economic interpretation and is difficult to understand for the common voter. In this paper, we suggest a new, more appropriate indicator – Government debt-to-Net Wealth of Households (D/NWH), which is inspired by the one-off wealth tax. Using high quality data from the Czech Statistical Office, Eurostat and Wiener Institut für Internationale Wirtschaftsvergleiche the debt burden imposed on the every Czech household was computed. While in 1995 the D/NWH was less than 7%, it has more than tripled by the end of 2012. If the Czech Republic was to repay its government debt immediately, it would have to impose a one-off tax of a quarter of the every household’s wealth. While it has been argued that the 60% threshold of D/GDP is an artificial ratio introduced by Maastricht Treaty, D/GDP reaching 182% (which is roughly the recent government debt of Greece) would be the critical insolvency level for the Czech Republic.

Links

MUNI/A/0811/2013, interní kód MU

Name: Hospodářská politika v EU a ČR

Investor: Masaryk University, Category A

Citovat

FISCHER, Jakub and Hana LIPOVSKÁ. Novel Government Debt Indicator: Government Debt to Net Wealth of Households. In Dagmar Špalková, Lenka Matějová. Current Trends in Public Sector Research - the 19th International Conference. Brno: Masarykova univerzita, 2015, p. 110-116. ISBN 978-80-210-7532-0.

@inproceedings{1218030,
   author = {Fischer, Jakub and Lipovská, Hana},
   address = {Brno},
   booktitle = {Current Trends in Public Sector Research - the 19th International Conference},
   editor = {Dagmar Špalková, Lenka Matějová},
   keywords = {public debt; one-off tax; Net Wealth of Households; Gross Domestic Product; Government Debt/Net Wealth of Households},
   howpublished = {tištěná verze "print"},
   language = {eng},
   location = {Brno},
   isbn = {978-80-210-7532-0},
   pages = {110-116},
   publisher = {Masarykova univerzita},
   title = {Novel Government Debt Indicator: Government Debt to Net Wealth of Households},
   year = {2015}
}

TY  - JOUR
ID  - 1218030
AU  - Fischer, Jakub - Lipovská, Hana
PY  - 2015
TI  - Novel Government Debt Indicator: Government Debt to Net Wealth of Households
PB  - Masarykova univerzita
CY  - Brno
SN  - 9788021075320
KW  - public debt
KW  - one-off tax
KW  - Net Wealth of Households
KW  - Gross Domestic Product
KW  - Government Debt/Net Wealth of Households
N2  - Government debt is one of the most important variables monitored in the European economies of 21th century. Due to Euro Convergence Criteria, it is most often calculated as a ratio of government debt-to-Gross Domestic Product (D/GDP). However, this ratio does not have clear economic interpretation and is difficult to understand for the common voter. In this paper, we suggest a new, more appropriate indicator – Government debt-to-Net Wealth of Households (D/NWH), which is inspired by the one-off wealth tax. Using high quality data from the Czech Statistical Office, Eurostat and Wiener Institut für Internationale Wirtschaftsvergleiche the debt burden imposed on the every Czech household was computed. While in 1995 the D/NWH was less than 7%, it has more than tripled by the end of 2012. If the Czech Republic was to repay its government debt immediately, it would have to impose a one-off tax of a quarter of the every household’s wealth. While it has been argued that the 60% threshold of D/GDP is an artificial ratio introduced by Maastricht Treaty, D/GDP reaching 182% (which is roughly the recent government debt of Greece) would be the critical insolvency level for the Czech Republic.
ER  -

FISCHER, Jakub and Hana LIPOVSKÁ. Novel Government Debt Indicator: Government Debt to Net Wealth of Households. In Dagmar Špalková, Lenka Matějová. \textit{Current Trends in Public Sector Research - the 19th International Conference}. Brno: Masarykova univerzita, 2015, p.~110-116. ISBN~978-80-210-7532-0.

Detailed Information on Publication Record