2011 Student Research Conference:
24th Annual Student Research Conference

The Impact of Domestic Government Debt Holding to Fiscal Stability
Xiang Li
Dr. Xiaofen Chen, Faculty Mentor

This paper examines the ratio of government debt held by domestic owners to total government liabilities. I analyze and simulate the impact of government debt ownership by developing a column-stochastic matrix model. This approach provides a theoretical way to find the equilibrium of the domestic government debt holding rate and to analyze its impact quantitatively. I use government debt data from the US and Japan to support the analysis and verifies the results of the model. Implications for the policy-making process, which may be significantly affected by this rate, are also discussed as an important supplement to this model.

Keywords: government debt, fiscal stability, stochastic matrix, policy-making

Topic(s):Economics
Mathematics

Presentation Type: Oral Paper

Session: 30-2
Location: MG 2090
Time: 1:30

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