Early-warning indicators for debt sustainability
Lunchtalk 'Early-warning indicators for debt sustainability'
At this lunchtalk a new CPB report was discussed. The policy brief "Early-warning indicators for debt sustainability" develops a new, dynamic framework for the assessment of the sustainability of public finances in the medium and long term. This framework incorporates economic uncertainty as well as the estimated fiscal policy reactions for each individual country. The paper suggests the use of two indicators for fiscal sustainability, which are applied to nine OECD countries, showing that they clearly distinguish countries that have sustainability concerns (Italy, Spain, Portugal and Iceland) from those that do not (US, UK, Netherlands, Belgium and Germany).
Related content
What will it cost the European Union to pay its economic recovery debt?
Servicing the EU debt until 2058 seems feasible, despite increased borrowing costs, but member countries must make choices about budget funding
Climate change, the next big financial threat
A warming planet poses new risks to European sovereign debt. How can the continent protect itself?
European Union debt financing: leeway and barriers from a legal perspective
The paper investigates the legal feasibility of the EU borrowing on the capital market to finance European public goods.
The macroeconomics of decarbonisation
At this event we will launch the book "The Macroeconomics of Decarbonisation: Implications and Policies"