This suggests you can adjust GDP for debt by subtracting deficit (w or w/o inflation). Seems odd? Why not interest? seekingalpha.com/article/147332
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i think because deficit already has interest payments. Total deficit = primary deficit + sovereign interest payments.
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hmm... okay. But shouldn't you should subtract face value in maturation year, not primary deficit in issue year for $-bonds?
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...never re-paid. It can decline as % of GDP, but usually it's just rolled over rather than paid down. Plus, sovereigns issue across...
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so procedurally, holders of old bonds simply get issued new bonds with face value, new date, that they can then sell?
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..new debt gets issued - separate transactions. But at the *plumbing* level, I don't really know. *Net* cash flows easier to visualise.
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I usually find myself surprised by some non-trivial insight when digging into procedural OS in finance. Devil in details :)
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Oh absolutely. Market microstructure a genuinely important field of enquire in macro-finance. Highly recommend Perry Mehrling's work.
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Though must clarify he ties up microstructure theory with monetary policy/theory, rather than operational details of finance.

