Perfil de Coyuntura Económica
Print version ISSN 1657-4214
RHENALS M., Remberto; GALVIS G., Diana and QUINTERO S., Bayron. Dynamics and sustainability of Colombian public debt: is there a margin for a countercyclical fisical policy?. Perf. de Coyunt. Econ. [online]. 2008, n.12, pp. 85-116. ISSN 1657-4214.
This paper shows the evolution of the Colombian public debt in the 1980-2008 period. As in Latin America, the debt-GDP ratio in Colombia shrank in the last five or six years. This reduction, at least in the Colombian case, can be explained as the result of internal macroeconomic conditions and a favorable international context, rather than as a result of fiscal policy. In a relatively optimistic scenario, the main conclusion is that, due to the relatively high level of public debt of the current central government, in relation to the government of the 1990s, the margin for a fiscal counter-cyclical policy in the current juncture of international crisis is very narrow, if we wish to preserve the sustainability of public debt. Counter-cyclical fiscal policies have limits, given that they cannot compromise the macroeconomic stability in the long run. Moreover, as it is known, a sharp increase of public spending in the current juncture, for instance, faces important political pressure when economic conditions change and will be necessary to reduce it.
Keywords : public debt; primary balance; sustainability; countercyclical fiscal policy.