Governments can issue public debt for both good and bad reasons. The former include intertemporal tax smoothing, fiscal stimulus, and asset management. In contrast, the bad reasons, which generate higher indebtedness, are mainly associated with political cycles, rent capture, intergenerational...

Total public debt in most emerging markets grew before and after the pandemic with a sizable share in foreign currency. Along this trend, interest payments increased even in the presence of active fiscal rules in some countries. How should debt management of public debt be set under a fiscal...

This study contends that Caribbean countries cannot adequately surmount their fiscal and debt challenges in the absence of binding rules that are geared toward entrenching fiscal discipline, curbing fiscal procyclicality, and improving budget transparency and credibility. Distilling global...

In this paper, we study the drivers of public debt surges across 172 countries from 1980-2021. We focus on the role of discrepancies between the annual change in public debt and the budget deficit, referred to as stock-flow adjustments (SFA). The analysis employs survival methods to model the...

Under what conditions do countries comply with their fiscal policy rules? We tackle this question in the context of emerging countries, with a specific focus on Latin America and the Caribbean, a region where fiscal rules have become increasingly common in recent decades. Based on an original...

Fiscal rules have gained popularity as tools to strengthen debt sustainability by constraining policy discretion. However, their track record in the case of emerging markets is mixed, as setting up a fiscal rule has been no guarantee of debt stabilization. International experience and empirical...

This research employs a quadratic exponential model to examine the dynamics of fiscal adjustments in the context of oil shocks. The findings suggest significant state dependence, with past fiscal adjustments increasing the likelihood of future adjustments and an asymmetry in oil shock effects....

Many countries in the Caribbean have been grappling with persistent fiscal imbalances and rising debt levels. The average debt to GDP ratio in the Caribbean in 2017 was 76.6 percent, higher than the negative debt-growth threshold of 60 percent of GDP. Also, the average fiscal deficit as a...

This paper assesses debt sustainability in Guatemala. Debt stability has been achieved at very low expenditure levels, at the expense of adequate provisioning of public goods and services and a widening gap in social development and infrastructure. Since fiscal outcomes are not independent from...

Medium Term Fiscal Frameworks (MTFs) have become one of the most popular reforms to the budgetary process in Latin America during the last decade, and introducing MTFs seemed to be the magic solution for most fiscal ailments. Nonetheless, there has been no comprehensive evaluation of their...