02017cas a2200253 a 4500 AALejournalIMF016260 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513536071 1018-5941 BD-DhAAL BD-DhAAL Mauro, Paolo. r minus g negative : Can We Sleep More Soundly? / Paolo Mauro, Jing Zhou. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Contrary to the traditional assumption of interest rates on government debt exceeding economic growth, negative interest-growth differentials have become prevalent since the global financial crisis. As these differentials are a key determinant of public debt dynamics, can we sleep more soundly, despite high government debts? Our paper undertakes an empirical analysis of interestgrowth differentials, using the largest historical database on average effective government borrowing costs for 55 countries over up to 200 years. We document that negative differentials have occurred more often than not, in both advanced and emerging economies, and have often persisted for long historical stretches. Moreover, differentials are no higher prior to sovereign defaults than in normal times. Marginal (rather than average) government borrowing costs often rise abruptly and sharply, but just prior to default. Based on these results, our answer is: not really. Mode of access: Internet Zhou, Jing. IMF Working Papers; Working Paper ; No. 2020/052 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/052/001.2020.issue-052-en.xml IMF e-Library