THE NATIONAL DEBT AND ECONOMIC POLICY IN THE MEDIUM TERM. THE ECONOMIC AND SOCIAL RESEARCH INSTITUTE, DUBLIN, 1986

FitzGerald, John D. (1986) THE NATIONAL DEBT AND ECONOMIC POLICY IN THE MEDIUM TERM. THE ECONOMIC AND SOCIAL RESEARCH INSTITUTE, DUBLIN, 1986. [Policy Paper]

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Abstract

The growth in the national debt has been a major concern of public policy in recent years reflecting the increasing cost of servicing this debt. Considerable attention has been given both to the need to bring the debt under control and to the cost to the nation from the outflow of interest on foreign debt. However, rather less attention has been given to the way in which the high level of public sector borrowing has been financed and to the impact on the economy of the method of financing actually adopted. The purpose of of this paper is: firstly, to examine the likely trend in the national debt and the cost of servicing it in the period 1986-1990; secondly, to examine the implications for the growth of output and the balance of payments of the manner of financing the increased debt; and thirdly to consider how the results of these exercises should modify our view of the medium-term prospects for the Irish economy and of the appropriate stance of economic policy. It considers these issues in a medium term context and, as a result, is not concerned with immediate developments in the area of exchange rates and interest rates.

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