Álvaro Pina, Mauricio Hitschfeld, Takashi Miyahara
Public debt-to-GDP ratios have risen substantially over the past 25 years, and multiple spending pressures threaten to increase them further. This column outlines the lessons learned from episodes of successful debt reduction in OECD countries since the late 1970s. Sustained primary budget surpluses have been a key driver of declining debt ratios, reflecting favourable cyclical conditions coupled with consolidation efforts that have changed the composition of the public finances. Expenditure restraint has curbed subsidies and moderated the upward trend in pension outlays, while largely sparing healthcare and education. Corporate, but not personal, income tax revenues have strongly increased.
Πηγή: Voxeu