Financial toxicity in living donor liver transplantation: A call to action for financial neutrality.

After 2 decades of limited growth, living donor liver transplant (LDLT) has been increasingly accepted as a promising solution to the growing organ shortage in the US. With experience, LDLT offers superior graft and patient survival with low rates of rejection. However, not all waitlisted patients have equal access to LDLT, with financial toxicity representing a substantial barrier. Potential living liver donors face indirect, direct, and opportunity costs associated with donation as well as insurance-based discrimination and variable employer leave policies. There are multiple potential national, local, and patient-centered solutions to address some of the cost-related issues associated with living LDLT. These include standardization of employer leave policies, creation of federal and state-led tax relief programs, optimization of National Living Donor Assistance Center use, engagement of independent living donor advocates, creation of financial toolkits, and encouragement of recipient or donor-led fundraising. In this piece, members of the North American Living Liver Donation Group, a consortium of 37 LDLT programs, explore these financial challenges and discuss solutions to achieve financial neutrality, where individuals can donate free from financial constraints or gains. As a community, it is imperative that we confront factors driving financial toxicity to improve equity and access to LDLT.

Parenting Students and Indicators of Financial Stability, Health, and Academic Success: Findings from a Population-Based Sample of Public Urban University Students.

Parenting students constitute a significant portion of the college population, with 22% of undergraduate students nationwide managing the dual responsibilities of parenthood and education. Single-parenting students face disproportionate challenges to achieving academic success. This study examines the health, financial, and academic aspects of parenting students attending a large, urban public university, specifically comparing single parents to their married or cohabiting counterparts and non-parenting students in New York City. We collected data from 2104 participants, including 142 single parents and 119 married or cohabiting parents, through a cross-sectional survey. Using adjusted regression models, we evaluated the associations between parenting status and financial, health, and academic factors. Our findings reveal that, in comparison to non-parents, single parents are significantly more likely to carry debt (adjusted odds ratio [aOR] 1.81), rely on food assistance (aOR 5.03), and achieve slightly lower GPAs (ß - 0.11). Single parents also work more hours (aOR 1.66) and have an increased likelihood of facing debt (aOR 2.66), housing difficulties (aOR 2.80), food insecurity (aOR 2.21), and lower GPAs (ß - 0.22) compared to their married or cohabiting peers. The disaggregation of single and married or cohabiting parents reveals significant disparities, emphasizing the vulnerability of single-parenting students in higher education. Targeted interventions addressing issues like food security and housing are essential to support the academic success of single parents.

What do ketogenic dietitians and physicians need? A survey from the KetoCollegeAdvance™ training in United Kingdom.

INTRODUCTION: The ketogenic diet is a valuable nonpharmacologic therapy for the treatment of refractory epilepsy in children and adults. It can be time-intensive for ketogenic teams, typically comprised of a physician and dietitian at a minimum. Challenges and barriers to providing ketogenic diet services to patients by members of these teams has not been studied extensively. METHODS: A survey was created and distributed to attendees at a ketogenic diet training conference (KetoCollegeAdvance™) held 21-23 May 2024 in United Kingdom. Questions included Likert scales and fill-in responses. Surveys were provided by 63 attendees (mostly dietitians) from 17 countries. RESULTS: Respondents were mostly dietitians (45/63, 71 %) and from the United Kingdom. In regards to perceived interest levels in KD in general in their countries, dietitians were perceived as 80 % very or extremely interested, parents (66 %), and neurologists (45 %). The majority of teams included a dietitian (79 %) and physician (78 %). The majority, 43 (68 %) of respondents, assumed care of all aspects of epilepsy care once the KD was started. Common barriers to starting KD services included a long waiting list, lack of adult KD services, funding dietitians, and low referrals. Barriers to continuing KD services included poor patient compliance, a lack of financial resources for some families to afford foods, and a need for more pre-made ketogenic foods including bread, pizza, pasta, potato fries, and chocolates. CONCLUSIONS: These results from a conference of international ketogenic dietitians and physicians highlights common difficulties in providing the ketogenic diet successfully. Addressing these barriers may help expand the usage of this therapy for more patients with epilepsy.

The affordability and obtainability of gluten-free foods for adults with coeliac disease following their withdrawal on prescription in England: A qualitative study.

BACKGROUND: Changes to prescribing policies in England have restricted or stopped access to gluten-free food on prescription for people with coeliac disease in some geographical areas. The present study aimed to explore the impact of these changes on the affordability and obtainability of gluten-free foods for adults with coeliac disease. METHODS: Semi-structured qualitative interviews (n = 24) were conducted with people with coeliac disease living in areas where prescriptions for gluten-free foods were no longer available, were restricted or followed national guidelines. Interviews explored the impact of gluten-free prescribing changes on the affordability and obtainability of gluten-free food, as well as dietary adherence. RESULTS: All participants considered gluten-free substitute foods to be expensive. Participants felt the availability of gluten-free foods has improved over time, also acknowledging some challenges remain, such as limited local availability. For most, the withdrawal of prescriptions had minimal impact requiring small adjustments such as reducing the quantity of foods obtained. However, greater challenges were faced by those less mobile, permanently sick or disabled and/or on lower incomes. CONCLUSIONS: The majority of participants affected by the withdrawal of prescriptions were able to adapt to cope with these changes. However, participants with mobility issues, who are permanently sick or disabled and/or on lower incomes were struggling to afford and obtain gluten-free substitute foods from elsewhere. The withdrawal of prescriptions may further widen health inequalities. Further research should focus on the long-term impacts of prescription withdrawal for the vulnerable groups identified.

Travel Distance Between Participants in US Telemedicine Sessions With Estimates of Emissions Savings: Observational Study.

BACKGROUND: Digital health and telemedicine are potentially important strategies to decrease health care's environmental impact and contribution to climate change by reducing transportation-related air pollution and greenhouse gas emissions. However, we currently lack robust national estimates of emissions savings attributable to telemedicine. OBJECTIVE: This study aimed to (1) determine the travel distance between participants in US telemedicine sessions and (2) estimate the net reduction in carbon dioxide (CO2) emissions attributable to telemedicine in the United States, based on national observational data describing the geographical characteristics of telemedicine session participants. METHODS: We conducted a retrospective observational study of telemedicine sessions in the United States between January 1, 2022, and February 21, 2023, on the doxy.me platform. Using Google Distance Matrix, we determined the median travel distance between participating providers and patients for a proportional sample of sessions. Further, based on the best available public data, we estimated the total annual emissions costs and savings attributable to telemedicine in the United States. RESULTS: The median round trip travel distance between patients and providers was 49 (IQR 21-145) miles. The median CO2 emissions savings per telemedicine session was 20 (IQR 8-59) kg CO2). Accounting for the energy costs of telemedicine and US transportation patterns, among other factors, we estimate that the use of telemedicine in the United States during the years 2021-2022 resulted in approximate annual CO2 emissions savings of 1,443,800 metric tons. CONCLUSIONS: These estimates of travel distance and telemedicine-associated CO2 emissions costs and savings, based on national data, indicate that telemedicine may be an important strategy in reducing the health care sector's carbon footprint.

Investigating Canadian Radiology Residents' Personal Financial Literacy: A Nation-Wide Assessment.

Purpose: Canadian resident physicians carry large debt to finance their education, which impacts their wellness and their future decision making. The objective of this observational study is to assess the financial literacy of Canadian radiology residents through testing their financial knowledge and examining their current financial status. Methods: A survey was designed to assess the financial literacy and current financial status of radiology residents, which was distributed to Canadian radiology residents via Google Forms. Descriptive analyses on preliminary data and the association between level of training and financial quiz scores were obtained. Results: 104 valid responses from 16 universities were received. The majority (53%) of residents indicated that their debt was greater than $150 000. Residents on average scored 71% on the financial quiz and the scores were not associated with training level (P = .71). The majority (89%) of residents indicated a strong interest in a formal financial literacy curriculum, with 80% preferring a physician-led curriculum. Conclusion: Overall, residents face a high debt burden. Current resident physicians value a formal financial literacy curriculum as a part of their residency program despite existing financial knowledge. Most importantly, residents feel that a curriculum created with involvement of other physicians would be optimal.

Urban Churches Show an Increase in Attendance, Donations, and Finances During the COVID-19 Pandemic in the USA: Evidence from the United Methodist Church.

The COVID-19 pandemic has had a significant impact on religion and its practice. This paper aims to examine how the pandemic affects religious activities, donations, and finances over time and across regions within the United Methodist Church (UMC) in the USA. To address this question, we analyze survey data collected during the pandemic from 2963 churches in the USA by United Methodist Communications. Our analysis utilizes several quantitative techniques, including Z-tests, one-way analysis of variance (ANOVA), and multinomial logistic regressions. The results indicate a decrease in church attendance over time, with a more pronounced effect observed in non-urban areas (suburban, small town, and rural). Similarly, while church donations and finances mitigate over time across churches, churches in urban areas experience a quicker rebound compared to those in non-urban areas. Lastly, we find that church attendance and donations positively affect finances. These findings hold important implications for churches in various regions, offering insights to develop strategies for navigating the challenges posed by the COVID-19 pandemic.

The Financial Burden of Functional Neurological Disorders.

PURPOSE OF REVIEW: Functional neurological disorder (FND) is a common and severely debilitating condition lacking clinical ownership, existing between neurology and psychiatry. This article reports the findings of recent research investigating the economic costs of FND diagnosis and management. We define what the costs are, why they exist, and suggest actionable steps to reduce them. RECENT FINDINGS: The financial burden of FND exists across the globe characterized by high healthcare utilization resulting in exorbitant direct and indirect costs for the patient, healthcare system, and society. Inadequate medical education and stigmatization of the disorder prolong the time to diagnosis, during which cyclical utilization of inpatient and emergency department services drive up costs. Despite being cost-effective, lack of accessible treatment compounds the issue, leaving patients without a reliable exit. Recent findings support an increased awareness and the need for a cultural shift to overcome the financial burden associated with this underserved population.

Relationship between income and concerns about physical changes and help-seeking by older adult cancer survivors: a secondary analysis.

OBJECTIVE: Globally, the number of older adults surviving cancer is anticipated to grow rapidly over the next decades. Cancer and its treatment can leave survivors with a myriad of challenges including physical changes which impact independence and quality of life. This project explored the relationship of income level with concerns and help-seeking for physical changes following treatment in older Canadian survivors of cancer. METHODS: A Canada-wide survey of community-dwelling survivors of cancer explored their experiences with survivorship care one to three years following completion of treatment. A secondary trend analysis examined the relationship of income with older adults' level of concern and help-seeking experiences regarding physical consequences they attributed to their cancer treatment. RESULTS: In total, 7,975 people aged 65 years and older who survived cancer responded to the survey, of whom 5,891 (73.9%) indicated annual household income. Prostate (31.3%), colorectal (22.7%) and breast (21.8%) cancer accounted for the majority of respondents. Of those who reported household income data, over 90% wrote about the impact of physical changes following treatment, their concerns about the changes, and whether they sought help for their concerns. The most frequently identified physical challenge was fatigue (63.7%). Older survivors with low annual household incomes of less than $CA25,000 reported the highest levels of concern about multiple physical symptoms. 25% or more of the survey respondents across all income levels reported difficulty finding assistance for their concerns about the physical challenges, especially in their local communities. CONCLUSION: Older survivors of cancer can experience a range of physical changes, amenable to intervention by physical therapy, yet experience challenges obtaining relevant help. Those with low income are more severely affected, even within a universal healthcare system. Financial assessment and tailored follow-up are recommended.

When couples fight about money, what do they fight about?

Conflicts about money and finances can be destructive for both the quality and longevity of relationships. This paper reports on a descriptive analysis of the contents of financial conflicts in two samples. Study 1 examined severe financial conflicts in social media posts (N = 1014) from reddit (r/relationships). Eight themes were identified via thematic analysis: "unfair relative contributions" "who pays for joint expenses", "job and income", "exceptional expenses", "terms of financial arrangements", "discrepant financial values", "one-sided financial decisions", and "perceived irresponsibility". Study 2 examined reports of more mundane financial disagreements recalled by married individuals (N = 481). Seven themes were identified via thematic analysis: "relative contributions", "job and income", "different values", "exceptional expenses", "mundane expenses", "money management", and "perceived irresponsibility". In both samples, themes could be ordered along the dimensions of "concerns about fairness" and "concerns about responsibility". The association of relationship outcomes (perceived partner responsiveness, couple satisfaction) with each theme and demographic predictors (income, relationship length, shared finances) were explored. Independent t-tests suggested that participants who recalled disagreements fitting the themes at the extreme ends of the two dimensions ("unfair relative contributions" and "perceived irresponsibility") reported worse relationship outcomes. In contrast, participants recalling disagreements fitting the theme of "mundane expenses" reported better relationship outcomes.

Moral distress and patients who forego care due to cost.

BACKGROUND: In the US, many patients forgo recommended care due to cost. The ANA Code of Ethics requires nurses to give care based on need. Therefore, US nurses are compelled to practice in a context which breaches their professional ethical code. RESEARCH OBJECTIVES: This study sought to determine if nurses do care for patients who forgo treatment due to cost (PFTDC) and if so, does this result in an experience of moral distress (MD). RESEARCH DESIGN: Semi-structured interviews were transcribed and analyzed using a qualitative content analysis. PARTICIPANTS AND RESEARCH CONTEXT: A convenience sample of 20 nurses in practice for at least one year from a variety of health care setting participated. ETHICAL CONSIDERATIONS: This project was approved by the Michigan State University Biomedical Institutional Review Board. RESULTS: There were 19 female and one male nurse-participants, averaging 47 years old with an average of 10 years in practice. 18 reported caring for PFTDC. These 17 nurse-participants experienced a moderate degree of MD as a result, averaging 5.4 of 10 on the Moral Distress Thermometer. In the interviews, the following themes were identified, strategies to help PFTDC, and the broken US health care system which had the subthemes of preference for business over patient-oriented benefit, PFTDC using the emergency department, and limited support for treatment/management of PFTDC. CONCLUSIONS: The existence of this phenomenon places the profession of nursing in the US in a position of moral compromise and threatens to corrupt the institution of nursing in the US.

Heterogeneous Retirement Savings Strategy Selection with Reinforcement Learning.

Saving and investment behaviour is crucial for all individuals to guarantee their welfare during work-life and retirement. We introduce a deep reinforcement learning model in which agents learn optimal portfolio allocation and saving strategies suitable for their heterogeneous profiles. The environment is calibrated with occupation- and age-dependent income dynamics. The research focuses on heterogeneous income trajectories dependent on agents' profiles and incorporates the parameterisation of agents' behaviours. The model provides a new flexible methodology to estimate lifetime consumption and investment choices for individuals with heterogeneous profiles.

A forensic analysis of spin-off and downstream revenue in an academic vascular surgery practice: Unveiling the "vascular X-factor" in a tertiary health care system.

BACKGROUND: Owing to the high level of patient and operative complexity, vascular surgery represents a major driver for elevating case mix index within health care institutions. Although several specialty services are recruited in the care of these patients, it has been difficult to quantify the financial impact of these vascular patient across the health care enterprise. This study aims to quantify all revenues attributable to the introduction of vascular surgery patients within a tertiary health care system. METHODS: Billing data from 2017 to 2020 for all new vascular surgery patients entering a tertiary health care system were captured, and segregated by encounter type--inpatient versus outpatient. Within these major categories, vascular revenue streams were analyzed according to procedural pathology types, such as aneurysm, peripheral vascular disease, cerebrovascular, and venous. Subsequent revenues for nonvascular services were also captured for both inpatient and outpatient encounters that were tied to the initial vascular surgical encounter. Revenues attributable to vascular patients were analyzed and followed with respect to other hospital service lines. RESULTS: A total of 1115 new patients were introduced to the health care system for the first time by vascular surgery. These new patients generated more than $26 million in gross revenue and more than $10 million in contribution margin to the hospital during this time interval in aggregate. From a procedural standpoint, aortic surgery generated more than $7.4 million in revenue and $2.9 million in health system contribution margin. Peripheral vascular disease contributed $7.3 million and $2.6 million in revenue and contribution margins, respectively. Aortic surgery cases generated the highest margin per encounter encompassing the total sum of contributions. Subtracting all revenue attributable to vascular billing (spin-off), new patients brought in by vascular generated $9.6 million in revenue and $4.3 million in contribution margin from other service lines. Vascular access procedures produced the greatest spin-off margin per encounter at $10,985, and ancillary inpatient/outpatient generated the greatest number of spin-off encounters (n = 597) and revenue ($8,181,708). CONCLUSIONS: Patients introduced by a tertiary care vascular surgery program produce a significant revenue/margin for the parent health care system. When considering the fiscal health of a vascular program within a tertiary health care system, spin-off and downstream revenue should be considered in terms of overall value.

Improving the Reliability of Water Service Delivery in Rural Kenya through Professionalized Maintenance: A System Dynamics Perspective.

Reliable water service delivery continues to be a complex global issue that is particularly challenging in rural communities. Despite billions of dollars of infrastructure interventions, sustainable water services remain out of reach for millions of people. Professionalized maintenance services have emerged as a service provision strategy to supplement the community-based rural water management approach. This study applies system dynamics modeling to assess the potential impact of scaling up professionalized maintenance services on piped water systems in Kitui County, Kenya. The study results show that over a 10 year simulation, calibrated with 21 months of empirical data and based on a range of key assumptions, delivery of professionalized maintenance services across the county may increase countywide functionality rates from 54% to over 83%, leading to a 67% increase in water production. Furthermore, the increase in preventive maintenance activities and proactive repairs can lead to less frequent major breakdowns and reduction in county government spending on major repairs by over 60%. However, current service fee income from communities accounts for 8% of the total cost of service, necessitating substantial sustained external financing or government subsidies to be financially viable at scale.

Financial burden and health-seeking behaviors related to chronic diseases under the National Health Insurance Scheme in Bolikhamxay Province, Lao PDR: a cross-sectional study.

BACKGROUND: Chronic diseases pose a serious threat to health and longevity worldwide. As chronic diseases require long periods of treatment and may become serious conditions, the ensuing financial burden is often worse than that for non-chronic diseases. In 2016, the Lao PDR implemented the National Health Insurance (NHI) system, which covers select provinces. However, data on health service accessibility and the financial burden on households, especially those with chronically ill members covered by the NHI, are scarce. METHODS: This study used a cross-sectional design. Data collection was conducted in Bolikhamxay province (population = 273,691), from January 15 to February 13, 2019. In total, 487 households, selected through stratified random sampling, were surveyed via questionnaire-based interviews. Healthcare service usage and financial burden were examined. RESULTS: A total of 370 households had at least one member with self-reported health issues within the last 3 months prior to the interview, while 170 had at least one member with a chronic condition. More than 75% of the households accessed a health facility when a member experienced health problems. The majority of households (43.2%) spent the maximum value covered by the NHI, but households in the second largest group (21.4%) spent 10 times the maximum value covered by the NHI. The prevalence of catastrophic health expenditure (i.e., health-related expenditure equivalent to > 20% of total income) was 25.9% (20% threshold) and 16.2% (40% threshold). Through logistic regression, we found that the major factors determining financial catastrophes owing to health problems were household members with chronic illness, hospitalization, household poverty status, household size (for both the 20 and 40% thresholds), visiting a private facility (20% threshold), and distance from the province to the referral hospital (40% threshold). CONCLUSIONS: The NHI system has had a positive effect on households' access to health facilities. However, catastrophic health expenditure remains high, especially among chronically ill patients. Facilities under the NHI system should be improved to provide more services, including care for chronic conditions.

Nursing practicum equity for a changing nurse student demographic: a qualitative study.

BACKGROUND: The nursing practicum (clinical practice) is an essential but often highly stressful aspect of the nursing degree. A review of the published literature reveals a strong focus on the stressors that originate within the practicum environment, rather than the student's life outside the university and practice setting. This article reports on an Australian study, completed before the COVID-19 pandemic, of the university experiences of undergraduate women nurse students with family responsibilities. The findings reveal the importance of factors outside the university on the women students' practicum experience and their ability to engage and achieve. METHODS: The study was qualitative, guided by Gadamer's hermeneutic philosophy. Twenty-nine women students with family responsibilities (partners and children) were interviewed at two stages of their degree journey. Over 50 h of data were thematically analysed. FINDINGS: The themes 'family pressure' and 'practicum poverty' describe the impact of domestic work, family finances and practicum organisation on student stress, wellbeing, achievement, thoughts of attrition, and family tension. These findings are particularly pertinent to Australia and other developed nations where the nurse student demographic continues to age. An interpretation of these findings against the recent impact of COVID-19 on nurse education and women's life choices reveals the likelihood that these difficulties have intensified for women students with family responsibilities since the pandemic began. CONCLUSIONS AND RECOMMENDATIONS: Many developed nations, including Australia, are increasingly reliant on older women nurse students to maintain the future graduate nursing workforce. This change in nurse student demographic to the mature-age student requires a revision of the organisation of the nursing practicum. Recommendations to nurse education to improve practicum accessibility for women students who have family responsibilities include the application of a flexible and collaborative approach to practicum organisation and communication. Wider recommendations to Government include a revision of the way the nursing student is financially supported during the practicum. Further research that explores the practicum experience for women nurse students during and following the COVID-19 pandemic is also recommended.

Wealth, Income, and Preferences for Redistribution: Evidence from 30 countries.

This analysis probes the relationship between individuals' preferences for redistribution and their economic self-interest. We analyze personal finance and preferences data from 30 countries included in the 2009 ISSP to analyze whether respondents' personal income, financial wealth, or housing wealth are related to their opinions about economic redistribution, poor aid, and unemployment support. We find evidence of a relationship between income and preferences in English-speaking OECD countries, and between home equity, financial wealth, and preferences in Nordic countries. However, that linkage varies by policy attitude and asset type, and is also non-existent in some countries.

Religious Congregations' Technological and Financial Capacities on the Eve of the COVID-19 Pandemic.

Background: The COVID-19 pandemic dramatically upended religious life and placed significant strain on religious congregations. However, the effects of the pandemic were likely not felt evenly across the religious landscape. Purpose: We used data from the fourth wave of the National Congregations Study, gathered on the eve of the coronavirus pandemic in 2018-19, to identify the kinds of congregations that may have been especially vulnerable to the challenges of the COVID-19 pandemic. Methods: Using bivariate and multiple regression analysis, we examined two aspects of congregations' preparedness for the pandemic: technological infrastructure and financial stability. Results: We found that, while many congregations were technologically and financially equipped for a time of social distancing and economic recession, there were stark inequalities in levels of preparedness among congregations on the basis of race, class, size, urban/rural location, religious tradition, and the age of congregations' parishioners. In particular, Catholic congregations and congregations with older attendees tended to lack streaming or online communication capacities, and both rural and small congregations had more limited technological infrastructure and less financial cushion. Somewhat surprisingly, predominantly Black congregations were more likely to have worship streaming systems set up prior to the pandemic, though these congregations were more likely to lack other kinds of technological and financial infrastructure. Conclusions and Implications: Though COVID-19's full impact on congregations will not be known for several years, these results highlight variations in congregations' readiness for the pandemic's challenges, and they show that COVID-19's impact likely has not been felt equally across the religious landscape.

The Financial Impacts of COVID-19 on United Methodist Churches in North Carolina: a Qualitative Study of Pastors' Perspectives and Strategies.

Background: In the wake of the COVID-19 pandemic, churches in the United States were forced to stop meeting in person and move to remote forms of worship and congregational life. This shift likely impacted congregational finances, which are primarily driven by individual donations. Initial research has suggested that there is a great deal of heterogeneity in the financial impact on congregations, but there has been scant research examining how pastors and congregations are managing finances during this period. Purpose: This research examines the impact of COVID-19 and its associated restrictions on congregational finances and the strategies pastors used to adapt their church's finances to the health restrictions. Methods: We conducted in-depth, qualitative interviews with 50 pastors in the North Carolina and Western North Carolina Conferences of the United Methodist Church appointed to 70 congregations. Using applied thematic analysis, we analyzed transcripts at both the pastor and congregation-level to identify similarities and differences in financial impact, financial strategies, and pastor experiences during the pandemic. Results: Most congregations reported small decreases in giving that were offset by federal Paycheck Protection Program (PPP) loans and other grants from the denomination. Some congregations, mostly urban and fairly large, reported significant increases in giving, while several other, predominantly small congregations, reported their church's finances had been negatively impacted by the pandemic. Even in cases where the net impact of the pandemic was small or non-existent, pastors were forced to adopt a host of new strategies to manage finances. In general, small and large congregations experienced and responded to the financial impact of the pandemic very differently.and Implications. Conclusions: This research suggests that the pandemic's impact on congregational finances were more than just on the bottom line. And while most churches weathered the economic challenges without severe impacts, questions remain as to the long-term impact of the pandemic on church finances. Supplementary Information: The online version contains supplementary material available at 10.1007/s13644-021-00474-x.

Dynamics of the public-debt-to-gdp ratio: can it explain the risk premium of treasury bonds?

We examine the relationship between the risk premium markets demand to hold the Treasury Bonds of a given country and the sustainability of the public finances of the country. We inquire to what extent do markets use the dynamic evolution of the public-debt-to-gdp ratio as an indication of the likelihood of a public debt default. Specifically, our empirical research design involves the following steps: (i) we use the dynamic equation of the public-debt-to-gdp ratio to build forecasts of future values of this ratio in the eurozone countries; (ii) we then use these forecasts in a regression to see how important they are to explain the risk premium implicit in the treasury bond yields. We find that projections of future values of the public-debt-to-gdp ratio do impact current 10 year bond spreads. According to our regressions, markets seem to give more weight to forecasts with a horizon smaller than 10 years. Our results suggest that agents use a relatively simple mechanism to forecast the public debt-to-gdp ratio, a mechanism which can be used while updated forecasts from international organizations are not yet available. On the other hand, according to our estimations, euro area sovereign debt markets ceased to significantly discriminate countries based on their public debt prospects after the 2012 'Whatever It Takes" speech and the announcement of the Outright Monetary Transactions (OMT) program-suggesting that these events had a significant calming effect on the markets. Supplementary Information: The online version contains supplementary material available at 10.1007/s10663-022-09547-8.