Public Wealth in the United States
Author/Editor:
Fabien Gonguet ; Klaus-Peter Hellwig
Publication Date:
July 2, 2019
Electronic Access:
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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Summary:
We analyze the US public sector balance and project it forward under the assumption that current policies remain in place. We first document the history of the balance sheet and its components since World War II, with a detailed account of its evolution during and after the global financial crisis. While, based on assets and liabilities alone, public sector net worth is negative, additional challenges arise from commitments to future spending implied by current legislation and demographic trends. To quantify the risks to the balance sheet, we then apply the macroeconomic scenarios from the Federal Reserve’s bank stress test to the public sector balance sheet.
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