- "The example of Japan shows that a country can have very high public debt if:
• it is financed by domestic savings;
• domestic savers do not demand high returns."
- "Non-resident lenders are normally more demanding in terms of return. This shows that the danger consists in:
• having accumulated a substantial public debt;
• then change over to a situation where domestic savings are no longer sufficient, which requires a sharp increase in long-term interest rates."
- "This may occur in particular because of population ageing, which reduces the household savings rate, and this is a threat for Japan, but also for other countries in the future, such as France, Germany and Italy."
• it is financed by domestic savings;
• domestic savers do not demand high returns."
- "Non-resident lenders are normally more demanding in terms of return. This shows that the danger consists in:
• having accumulated a substantial public debt;
• then change over to a situation where domestic savings are no longer sufficient, which requires a sharp increase in long-term interest rates."
- "This may occur in particular because of population ageing, which reduces the household savings rate, and this is a threat for Japan, but also for other countries in the future, such as France, Germany and Italy."
Natixis Flash Economics 376 20100723
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