1 / 7

A Discourse on Debt and Economic Growth in the Caribbean Community

A Discourse on Debt and Economic Growth in the Caribbean Community. by Professor Compton Bourne, PhD, O.E. CONTEMPORARY DEBT SITUATION CARIBBEAN COUNTRIES ARE HIGHLY INDEBTED. Debt as % of GDP. y = af(k). s . Contribution of Debt to Economic Growth.

jaden
Download Presentation

A Discourse on Debt and Economic Growth in the Caribbean Community

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. A Discourse on Debt and Economic Growth in the Caribbean Community by Professor Compton Bourne, PhD, O.E.

  2. CONTEMPORARY DEBT SITUATION CARIBBEAN COUNTRIES ARE HIGHLY INDEBTED Debt as % of GDP

  3. y = af(k) s Contribution of Debt to Economic Growth n+w=k

  4. Debt Sustainability • Old Version Focuses on Debt Service Relative to Fiscal Revenues and Exports of Good and Services. Data Indicative of Problem of Diminution of Debt Capacity. • Modern Version Focuses on Primary Surplus. The Easterly Formulation – ∞ • ∫ e ‾rt (Tt + At - Gt) dt ≥ Do 0 • where T is tax revenues, • A is Net debt inflows, • G is government expenditures, • D is public debt stock, • and r is the discount rate

  5. Debt Sustainability p/(r-g) = Do/Yo Tt + At - Gt) /Yt = (r-g) Dt / Yt Interest Rates Rose and Economic Growth Rates Decreased 1997-2004 in the Caribbean causing the Required Primary Surplus to Increase

  6. Debt SustainabilityAnnual Growth Rate of Real GDP%

  7. Towards a Conclusion THE END

More Related