Fiscal stance, fiscal rules, and public debt dynamics in the United States

Attahir B. Abubakar; Suleiman .O Mamman; Jamilu Iliyasu

doi:10.1111/pbaf.12394

Fiscal stance, fiscal rules, and public debt dynamics in the United States

Attahir B. Abubakar^*, Suleiman .O Mamman, Jamilu Iliyasu

^*Corresponding author for this work

School of Business and Creative Industries

Research output: Contribution to journal › Article › peer-review

Abstract

Public debt in the United States has continued to rise despite the implementation of various policy measures aimed at curbing its growth. The Autoregressive Distributed Lag (ARDL) and Dynamic Simulated ARDL models were used to examine the effect of fiscal stance and fiscal rules on the dynamics of U.S. public debt. The findings reveal that while fiscal tightening is useful in reducing public debt accumulation, the adoption of fiscal rules may be unbeneficial for curtailing public debt, implying that discretion, rather than rules, may be more desirable for public debt management in the United States.

Original language	English
Article number	12394
Number of pages	11
Journal	Public Budgeting & Finance
Early online date	5 Feb 2025
DOIs	https://doi.org/10.1111/pbaf.12394
Publication status	E-pub ahead of print - 5 Feb 2025

Keywords

public debt
fiscal consolidation
austerity
fiscal rules
debt sustainability
United States

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1111/pbaf.12394Licence: CC BY 4.0

2025 01 12 Abubakar et al Fiscal finalFinal published version, 827 KBLicence: CC BY 4.0

Cite this

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abstract = "Public debt in the United States has continued to rise despite the implementation of various policy measures aimed at curbing its growth. The Autoregressive Distributed Lag (ARDL) and Dynamic Simulated ARDL models were used to examine the effect of fiscal stance and fiscal rules on the dynamics of U.S. public debt. The findings reveal that while fiscal tightening is useful in reducing public debt accumulation, the adoption of fiscal rules may be unbeneficial for curtailing public debt, implying that discretion, rather than rules, may be more desirable for public debt management in the United States.",

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AB - Public debt in the United States has continued to rise despite the implementation of various policy measures aimed at curbing its growth. The Autoregressive Distributed Lag (ARDL) and Dynamic Simulated ARDL models were used to examine the effect of fiscal stance and fiscal rules on the dynamics of U.S. public debt. The findings reveal that while fiscal tightening is useful in reducing public debt accumulation, the adoption of fiscal rules may be unbeneficial for curtailing public debt, implying that discretion, rather than rules, may be more desirable for public debt management in the United States.

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KW - debt sustainability

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Fiscal stance, fiscal rules, and public debt dynamics in the United States

Abstract

Keywords

UN SDGs

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Cite this