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Wednesday, July 30, 2014

The Kiel Institute Barometer of Public Debt —

The Kiel Institute Barometer of Public Debt —



The Primary Surplus
The primary surplus is the difference between a country’s government revenues and expenditures, exclusive of interest. The ratio of the primarysurplus to GDP (the primary surplus ratio PSR) must be equal to or greater than the debt ratio (S) times the difference between the nominal interest rate (i) and the nominal growth rate (g) if the debt ratio is to remain stable.
PSR ≥ (i – g)/(1 + gS.

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