Government assets are just as important as deficits – IMF research
Borrowing costs are determined by structure of public assets
The asset positions of governments are as important a factor as public debt levels in determining borrowing costs, says research published by the International Monetary Fund.
In Public sector balance sheet strength and the macro economy, Reza Yousefi studies the size and liquidity of public assets and liabilities, their volatility and mismatches, and how they correlate with each other.
“The findings suggest that financial markets consider governments’ asset positions in addition to debt levels
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