an Age of Debt Guay Lim 20 July 2017 Page 1 Outline What Debt? - - PowerPoint PPT Presentation

▶
an age of debt
SMART_READER_LITE
LIVE PREVIEW

an Age of Debt Guay Lim 20 July 2017 Page 1 Outline What Debt? - - PowerPoint PPT Presentation

Mar 18, 2024 404 likes •627 views

MELBOURNE INSTITUTE Applied Economic & Social Research Fiscal Stimulus in an Age of Debt Guay Lim 20 July 2017 Page 1 Outline What Debt? Empirical facts: Debt, Deficits and Interest Payments Why should we care? High debt,

slide-1
SLIDE 1

Page 1

MELBOURNE INSTITUTE Applied Economic & Social Research

Fiscal Stimulus in an Age of Debt

Guay Lim

20 July 2017

slide-2
SLIDE 2

Page 2

Outline

  • What Debt?
  • Empirical facts: Debt, Deficits and Interest Payments
  • Why should we care?
  • High debt, low growth economy and distributional effects
  • What can policy do?
  • Short-run, Long-Run, Monetary and Fiscal Policies

ESOC | 20 July 2017

slide-3
SLIDE 3

Page 3

Net Government Debt (% of GDP)

Source: Budget Papers: Historical Australian Government Data: Table 4

  • 5

5 10 15 20 25 94 96 98 00 02 04 06 08 10 12 14 16 18

estimates 16/17

slide-4
SLIDE 4

Page 4

Household Debt (% of Income)

40 60 80 100 120 140 94 96 98 00 02 04 06 08 10 12 14 16

Source: RBA Statistical Table E2

slide-5
SLIDE 5

Page 5

General Govt Debt (% of GDP): OECD (2015)

50 100 150 200 250

EST CHL TUR LUX NOR LVA CHE DNK MEX CZE SVK SWE AUS POL FIN NLD DEU ISR IRL HUN SVN AUT GBR CAN ESP FRA USA BEL PRT ITA GRC JPN Source: OECD Statistics

slide-6
SLIDE 6

Page 6

Household Debt (% of net disposable income) OECD (2015)

50 100 150 200 250 300 350

HUN LVA SVN POL SVK CZE EST ITA DEU AUT FRA USA BEL GRC ESP FIN JPN PRT GBR KOR CAN SWE IRL CHE AUS NOR NLD DNK Source: OECD Statistics

slide-7
SLIDE 7

Page 7

Net Government Interest payments (% of GDP)

  • 0.4

0.0 0.4 0.8 1.2 1.6 2.0 94 96 98 00 02 04 06 08 10 12 14 16 18

estimates 16/17

Source: Budget Papers: Historical Australian Government Data Table 4

slide-8
SLIDE 8

Page 8

Household interest payments (% of income)

5 6 7 8 9 10 11 12 13 14 94 96 98 00 02 04 06 08 10 12 14 16

Source: RBA Statistical Table E2

slide-9
SLIDE 9

Page 9

Official Interest Rates (per cent)

1 2 3 4 5 6 7 8 94 96 98 00 02 04 06 08 10 12 14 16

Australia USA

Source: RBA Statistical Table F13

slide-10
SLIDE 10

Page 10

Growth in real GDP (per cent)

  • 4

4 8 12 16 94 96 98 00 02 04 06 08 10 12 14 16 18 20

Australia China USA forecasts

Source: IMF: World Economic Outlook

slide-11
SLIDE 11

Page 11

Inflation in Australia (per cent)

Source: RBA statistical table G1

1 2 3 4 5 6 94 96 98 00 02 04 06 08 10 12 14 16 HEADLINE UNDERLYING

slide-12
SLIDE 12

Page 12

Wage Growth (annual change, %)

Source: ABS

1.5 2.0 2.5 3.0 3.5 4.0 4.5 94 96 98 00 02 04 06 08 10 12 14 16

slide-13
SLIDE 13

Page 13

Households with owner-occupier housing debt (%)

RBA Statistical Tables E7

Share of households with home loan

Labour market status of reference person 2002 2006 2010 2014 Employee 45 46 48 46 Employer or self-employed 37 43 40 46

Unemployed 20 21 15 28

Retired 5 5 7 8 Other not in the labour force 19 18 19 17

slide-14
SLIDE 14

Page 14

Monetary policy and Growth

1 2 3 4 5 6 7 8 94 96 98 00 02 04 06 08 10 12 14 16

cash rate GDP growth

Source: ABS and RBA

slide-15
SLIDE 15

Page 15

Household Savings Ratio (per cent)

Source: ABS

  • 4

4 8 12 16 20 60 65 70 75 80 85 90 95 00 05 10 15

slide-16
SLIDE 16

Page 16

Contributions to growth (per cent)

  • 3
  • 2
  • 1

1 2 94 96 98 00 02 04 06 08 10 12 14 16

consumption investment

Source: ABS

slide-17
SLIDE 17

Page 17

Gini: Australia (0.337) OECD (0.318)

Presentation name | Tuesday, 25 July 2017 0.000 0.050 0.100 0.150 0.200 0.250 0.300 0.350 0.400 0.450 0.500 Chile Mexico United States Turkey Israel Estonia United Kingdom Latvia Spain Greece Portugal Australia New Zealand Japan Italy Canada OECD Ireland Korea Poland Switzerland France Germany Hungary Netherlands Luxembourg Sweden Austria Slovak Republic Belgium Czech Republic Finland Slovenia Denmark Norway

OECD

slide-18
SLIDE 18

Page 18

Source: OECD 0.0 10.0 20.0 30.0 40.0 50.0 60.0

Norway Iceland Slovenia Denmark Belgium Finland Slovak Republic Czech Republic Sweden Austria Luxembourg Netherlands Hungary Korea Germany Poland Switzerland France Ireland Canada Italy Japan OECD Spain New Zealand Australia Greece Portugal Latvia Israel Estonia United Kingdom United States Turkey Mexico Chile

OECD: Top 20%

OECD 0.0 2.0 4.0 6.0 8.0 10.0 12.0

Iceland Denmark Czech Republic Finland Norway Slovenia Slovak Republic Belgium France Sweden Austria Luxembourg Netherlands Switzerland Germany Hungary Ireland Poland OECD New Zealand United Kingdom Australia Canada Korea Portugal Italy Latvia Japan Greece Estonia Spain Turkey Israel United States Mexico Chile

OECD: Bottom 20%

OECD

slide-19
SLIDE 19

Page 19

Concluding Remarks

  • What Debt?
  • International perspective on government and household debt
  • Why should we care?
  • Low growth, low interest rates and distributional effects
  • What can policy do?
  • Short-run fiscal stimulus and long term goals

ESOC | 20 July 2017

slide-20
SLIDE 20

Page 20

MELBOURNE INSTITUTE Applied Economic & Social Research

Fiscal Stimulus in an Age

  • f Debt

Guay Lim

20 July 2017