The OECD Global Forum on Public Debt Management is a roundtable meeting where public debt managers from the OECD area as well as regulators, central bankers, other financial policy makers and, on occasion, private sector participants discuss best practices, experiences, and policies in the field of government debt management and the development of government and corporate securities markets with their counterparts from non-OECD countries. The relevance of these Global Forums has increased over the years as debt managers from emerging market countries increasingly face challenges similar to those of their counterparts from advanced markets due to pressures from global finance, the international nature of financial volatility, and the related need to share and implement best practices in this policy area. In addition, emerging markets have become more important players. Governments, investors, and financial intermediaries in both advanced and emerging markets stand to gain from debt managers making further progress in implementing best practices.
Public debt is an obligation on the part of a governmental unit to pay specific monetary sums to holders of legally designated claims at particular points in time. The sums owed to creditors may be defined in standard monetary units of the debtor government or in units of an external currency. The United States national debt represents, predominantly, an obligation of the federal government to pay specific sums of United States dollars to creditors. On the other hand, national debts may, and local debts must, be defined in units of external currency.
This text remains largely relevant because the positions of Thomas Piketty and those of the CADTM have not changed and require a much-needed debate. I do not have time to make a long comment on the opinion expressed by Thomas Piketty in Le Monde, but here are some thoughts:. It is very good that Thomas Piketty reintroduces the debate on the issue of debt cancellations. The examples he cites are relevant to the French revolution of the late 18 th century and the cancellations of the 20 th century.
We use a panel of 16 OECD countries over several decades to investigate the effects of government debts and deficits on long-term interest rates. In simple static specifications, a one-percentage-point increase in the primary deficit relative to GDP increases contemporaneous long-term interest rates by about 10 basis points. In a vector autoregression VAR , the same shock leads to a cumulative increase of almost basis points after 10 years.