Abstract: Public debt has surged in most advanced economies since 2007 and remains at historically high levels in many of them. What are the effects of this surge for  economic stability and growth? Why have interest rates on government securities remained so low in spite of the rising supply of government securities? And, most of all, if high public debt is a problem, what is the solution. Carlo Cottarelli will discuss these issues based on a book (“What we owe”) that will be published in September. He will argue that there is a need to gradually lower public debt and that this is achievable through  orthodox fiscal policy too, as long as high debt countries, particularly those more vulnerable, do not procrastinate the adjustment in their spending levels.

Carlo Cottarelli is IMF Executive Director for Italy. He served as Director of the Fiscal Affairs Department from November 2008 to October 22, 2013. After receiving degrees in economics from the University of Siena and the London School of Economics, he joined the Research Department of the Bank of Italy where he worked from 1981 to 1987 in the Monetary and Financial Sector Division. After working for about one year as head of the Economic Research Department of ENI (the main Italian energy company), Mr. Cottarelli joined the IMF in 1988, working for the European Department, the Monetary and Capital Markets Department, the Policy Development and Review Department, and the Fiscal Affairs Department. He was Deputy Director both in the European Department and the Strategy, Policy and Review Department. Mr. Cottarelli has worked on several advanced, emerging market, and low-income countries in the context of surveillance, IMF-supported programs, and technical assistance, including Albania, Croatia, Hungary, Lebanon, Russia, Serbia, Tajikistan, Turkey, Italy, and the United Kingdom. He is currently Director of the Fiscal Affairs Department, which provides advice in public finance matters to some 100 advanced, emerging and low-income economies every year. As head of the Fiscal Affairs Department, he was responsible for the development and publication of the Fiscal Monitor, one of the three IMF flagship publications. He has written several papers on fiscal and monetary policies and institutions, and edited books on inflation, monetary policy, and exchange rates.