Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238498 
Year of Publication: 
2020
Series/Report no.: 
ADBI Working Paper Series No. 1141
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This paper revisits the fiscal sustainability condition proposed by Domar (1944). The Domar condition is derived from the government budget constraint and thus focuses on the supply side of the government bond. By considering the demand for the government bond, this paper finds that public debt sustainability depends on interest rate sensitivity to changes in government bond supply and demand. Data shows that the prediction of our model on public debt sustainability is consistent with the cases of Greece and Japan.
Subjects: 
Domar condition
fiscal sustainability
demand for government bonds
JEL: 
E12
E62
H63
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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