Unexpected Consequences of Ricardian Expectations
... its share of this present value from the expected present value of income to determine a net wealth position. Then fiscal policy would affect aggregate consumer demand only if it altered the expected present value of taxes. But the preceding argument was that the present value of taxes would not cha ...
... its share of this present value from the expected present value of income to determine a net wealth position. Then fiscal policy would affect aggregate consumer demand only if it altered the expected present value of taxes. But the preceding argument was that the present value of taxes would not cha ...
Domestic Debt and Economic Growth in Pakistan
... interest for the period they hold bonds of permanent debt. Government has no obligation to purchase these bonds. These bonds can be sold in the stock exchange at their market value. The permanent debt of the government is the long term debt. It consists of long term market loans with maturities of b ...
... interest for the period they hold bonds of permanent debt. Government has no obligation to purchase these bonds. These bonds can be sold in the stock exchange at their market value. The permanent debt of the government is the long term debt. It consists of long term market loans with maturities of b ...
Sample Level I Multiple Choice Questions
... 7. A company currently has a debt-to-equity ratio of 1.25. Common shareholder’s equity is $4,000,000, consisting of 1.5 million shares outstanding with a current price of $28/share. Part of the company’s debt currently outstanding is $1,000,000 of convertible bonds. Each $1,000 par value bond can be ...
... 7. A company currently has a debt-to-equity ratio of 1.25. Common shareholder’s equity is $4,000,000, consisting of 1.5 million shares outstanding with a current price of $28/share. Part of the company’s debt currently outstanding is $1,000,000 of convertible bonds. Each $1,000 par value bond can be ...
Today`s Farm Real Estate Debt Landscape
... During the 1970s, farmland values surged with burgeoning farm incomes. Strong global economic growth of the 1970s spurred rising farmland values (Henderson, 2008). According to the International Monetary Fund, world GDP growth was around 4.5% annually during this time period. Higher incomes in deve ...
... During the 1970s, farmland values surged with burgeoning farm incomes. Strong global economic growth of the 1970s spurred rising farmland values (Henderson, 2008). According to the International Monetary Fund, world GDP growth was around 4.5% annually during this time period. Higher incomes in deve ...
6. Public Finance
... primary expenditures as well as increases in health, pension and social benefit expenditures (Chart 6.1). In addition, marked deceleration of the rate of increase in tax revenues due to changing composition of growth amid balancing of the external and domestic demand was also influential on the dete ...
... primary expenditures as well as increases in health, pension and social benefit expenditures (Chart 6.1). In addition, marked deceleration of the rate of increase in tax revenues due to changing composition of growth amid balancing of the external and domestic demand was also influential on the dete ...
Minsa`s operating performance was deceivingly strong, as the stellar
... Minsa’s results for 1Q00 were strong, but this was because of a low comparison base. The domestic volume increase was just 2%, while Maseca’s was almost 4%. The Central America plant has started operations and we estimate that volume in this region was between 1500 and 2000 tons, representing 8 or 9 ...
... Minsa’s results for 1Q00 were strong, but this was because of a low comparison base. The domestic volume increase was just 2%, while Maseca’s was almost 4%. The Central America plant has started operations and we estimate that volume in this region was between 1500 and 2000 tons, representing 8 or 9 ...
RISK AND PROFITABILITY AS CAPITAL STRUCTURE
... preferred over equity-issue if external financing is required. External equity is preferred only when the firm reaches its “debt capacity”. In this case there isn’t a determinate relationship between profitability and leverage. If there is a rich pool of good business opportunities and debt is avail ...
... preferred over equity-issue if external financing is required. External equity is preferred only when the firm reaches its “debt capacity”. In this case there isn’t a determinate relationship between profitability and leverage. If there is a rich pool of good business opportunities and debt is avail ...
1 Modelling borrowing constraints in Bewley models
... An implicit assumption that we have made so far is that, once households have taken on some debt, they commit to repay. Somewhere in the background of our economy there is an enforcement agency that makes sure that all the trades at every date are respected and carried out as promised [think “The ...
... An implicit assumption that we have made so far is that, once households have taken on some debt, they commit to repay. Somewhere in the background of our economy there is an enforcement agency that makes sure that all the trades at every date are respected and carried out as promised [think “The ...
A Practical Guide to Public Debt Dynamics, Fiscal
... towards zero, it implies that, asymptotically, the debt ratio cannot grow at a rate equal or higher than the (growth-adjusted) interest rate—which is what would happen if debt and interest were systematically paid by issuing new debt. Under the no-Ponzi game condition, debt and interest payments can ...
... towards zero, it implies that, asymptotically, the debt ratio cannot grow at a rate equal or higher than the (growth-adjusted) interest rate—which is what would happen if debt and interest were systematically paid by issuing new debt. Under the no-Ponzi game condition, debt and interest payments can ...
i Maximum Sustainable Government Debt in the Overlapping
... variables may not exist. Relative to the standard theoretical literature, the question here is whether, despite the fact that a government has no deficit, it may be in an unsustainable situation just because it has too high a stock of debt. Relative to the standard empirical literature, we would lik ...
... variables may not exist. Relative to the standard theoretical literature, the question here is whether, despite the fact that a government has no deficit, it may be in an unsustainable situation just because it has too high a stock of debt. Relative to the standard empirical literature, we would lik ...
CHAPTER 20 Hybrid Financing: Preferred Stock, Leasing
... The package would have been worth $925 + 50(2.50) = $1,050. This is $50 more than the actual selling price. The firm could have set lower interest payments whose PV would be smaller by $50 per bond, or it could have offered fewer warrants with a higher exercise price. Current stockholders are giving ...
... The package would have been worth $925 + 50(2.50) = $1,050. This is $50 more than the actual selling price. The firm could have set lower interest payments whose PV would be smaller by $50 per bond, or it could have offered fewer warrants with a higher exercise price. Current stockholders are giving ...
Balancing the Federal Budget
... How valid is this comparison? On the one hand, a comparison between the management of a household budget and management of the federal budget is tempting. It is a rhetorical device that pundits and politicians use when they are advocating fiscal restraint because it is a frame of reference voters wi ...
... How valid is this comparison? On the one hand, a comparison between the management of a household budget and management of the federal budget is tempting. It is a rhetorical device that pundits and politicians use when they are advocating fiscal restraint because it is a frame of reference voters wi ...
Local Capital Market Development
... emerging markets may not be adequate (e.g. incomplete records of past performance) and as such, the collateral may not be sufficient to attract local investors to purchase the bond. The WB could further enhance the bond with a partial credit guarantee in order for the bond to achieve a credit qualit ...
... emerging markets may not be adequate (e.g. incomplete records of past performance) and as such, the collateral may not be sufficient to attract local investors to purchase the bond. The WB could further enhance the bond with a partial credit guarantee in order for the bond to achieve a credit qualit ...
Secular stagnation, debt overhang and other rationales for sluggish
... by Reinhart and Rogoff (2009a,b). These include markers for housing, equity markets, unemployment, and public debt accumulation, as well as for the steep decline and subsequent slow recovery in output growth. However, long-term secular challenges may have begun in advanced economies even before the ...
... by Reinhart and Rogoff (2009a,b). These include markers for housing, equity markets, unemployment, and public debt accumulation, as well as for the steep decline and subsequent slow recovery in output growth. However, long-term secular challenges may have begun in advanced economies even before the ...
Financial Check Up
... Repayment Capacity 1. Term Debt and Capital Lease Coverage Ratio: • Cash available from operations to cover scheduled payments (net income plus depreciation and interest payments less withdrawals) divided by scheduled principal and interest payments on term loans and capital leases. • After provisio ...
... Repayment Capacity 1. Term Debt and Capital Lease Coverage Ratio: • Cash available from operations to cover scheduled payments (net income plus depreciation and interest payments less withdrawals) divided by scheduled principal and interest payments on term loans and capital leases. • After provisio ...
INTEREST PARITY (COVERED AND UNCOVERED)
... COVERED INTEREST PARITY exists when the returns on bonds denominated in different currencies are equal when it is assumed the forward markets are used to eliminate the ERR associated with future currency exchanges (i.e., when the bond matures). In the preceding example, since the return in the US (i ...
... COVERED INTEREST PARITY exists when the returns on bonds denominated in different currencies are equal when it is assumed the forward markets are used to eliminate the ERR associated with future currency exchanges (i.e., when the bond matures). In the preceding example, since the return in the US (i ...
LIVING (DANGEROUSLY) WITHOUT A FISCAL UNION
... prospective damage to the economy and financial markets. Even during these years, there was a tendency for the primary surplus to rise in response to higher debt. Figure 4 reports the 'rolling' coefficients on the debt-to-GDP ratio (based in the regression specification in Table 1), with the coeffic ...
... prospective damage to the economy and financial markets. Even during these years, there was a tendency for the primary surplus to rise in response to higher debt. Figure 4 reports the 'rolling' coefficients on the debt-to-GDP ratio (based in the regression specification in Table 1), with the coeffic ...
chapter summary
... Debt held by the public: Includes U.S. Treasury securities held by households, firms, banks, and foreign entities. The National Debt since World War II: Federal debt was over 100% relative to GDP by 1946 and in 2001 the debt was cut to 33% relative to GDP. In 2004 the debt was 37% relative to GDP, ...
... Debt held by the public: Includes U.S. Treasury securities held by households, firms, banks, and foreign entities. The National Debt since World War II: Federal debt was over 100% relative to GDP by 1946 and in 2001 the debt was cut to 33% relative to GDP. In 2004 the debt was 37% relative to GDP, ...
Currency Board and Debt Trap: Evidence from Argentina and
... was absent from world capital markets, the government deficit, which at times reached two digits as a portion of GDP, had to be monetized. And when the country re-entered the markets, as it did in the late 1970s, external factors such as world interest rates fluctuations played a central role in tri ...
... was absent from world capital markets, the government deficit, which at times reached two digits as a portion of GDP, had to be monetized. And when the country re-entered the markets, as it did in the late 1970s, external factors such as world interest rates fluctuations played a central role in tri ...
Lenders Serving Agriculture Real Estate Lenders
... financial stress in the next 3 years. When lender responses were sorted out, 54% felt the chance of financial stress is high and 26% felt this would be very high. The cost of inputs and volatile prices are the top 2 reasons for financial stress given by all respondents, followed loss of offfarm ...
... financial stress in the next 3 years. When lender responses were sorted out, 54% felt the chance of financial stress is high and 26% felt this would be very high. The cost of inputs and volatile prices are the top 2 reasons for financial stress given by all respondents, followed loss of offfarm ...
KNN Public Finance
... While interest rates are currently low, there appears to be very little upward pressure which would drastically change rates into early ...
... While interest rates are currently low, there appears to be very little upward pressure which would drastically change rates into early ...
African Debt since HIPC
... trends for nominal and PV measures. The average of the most cited debt ratio, nominal debt-to-GDP, was over 100 percent just prior to decision point. As has been documented elsewhere and was underlined by debt campaigners, this represents an untenable state of affairs for economies with average per ...
... trends for nominal and PV measures. The average of the most cited debt ratio, nominal debt-to-GDP, was over 100 percent just prior to decision point. As has been documented elsewhere and was underlined by debt campaigners, this represents an untenable state of affairs for economies with average per ...
PowerPoint Ch. 16
... Pension funds and banks regularly invest in debt and stock securities to: a. house excess cash until needed. b. generate earnings. c. meet strategic goals. d. avoid a takeover by disgruntled investors. ...
... Pension funds and banks regularly invest in debt and stock securities to: a. house excess cash until needed. b. generate earnings. c. meet strategic goals. d. avoid a takeover by disgruntled investors. ...
Diminishing Quality of Fiscal Institutions in the United States and European Union
... the future. However, promises to reduce the debt in the future have regularly been broken. This is the “time-inconsistency problem” (Nason and Plosser 2012), and reneging on earlier fiscal promises has reduced the credibility of Congress and presidents. In recognition of the debt problem and congres ...
... the future. However, promises to reduce the debt in the future have regularly been broken. This is the “time-inconsistency problem” (Nason and Plosser 2012), and reneging on earlier fiscal promises has reduced the credibility of Congress and presidents. In recognition of the debt problem and congres ...
Chapter 5 The Time Value of Money
... Of course, companies deviate from their target capital structure when they are offered a good deal. In terms of financing, this means that if the company observes attractive interest rates for debt financing, it might lean more heavily on debt financing. ...
... Of course, companies deviate from their target capital structure when they are offered a good deal. In terms of financing, this means that if the company observes attractive interest rates for debt financing, it might lean more heavily on debt financing. ...
Government debt
Government debt (also known as public debt, national debt and sovereign debt) is the debt owed by a central government. (In federal states, ""government debt"" may also refer to the debt of a state or provincial, municipal or local government.) By contrast, the annual ""government deficit"" refers to the difference between government receipts and spending in a single year, that is, the increase of debt over a particular year.Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby removing the need to pay interest. But this practice simply reduces government interest costs rather than truly canceling government debt, and can result in hyperinflation if used unsparingly.Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organization (e.g. the World Bank) or international financial institutions.As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers. Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Another common division of government debt is by duration until repayment is due. Short term debt is generally considered to be for one year or less, long term is for more than ten years. Medium term debt falls between these two boundaries. A broader definition of government debt may consider all government liabilities, including future pension payments and payments for goods and services the government has contracted but not yet paid.