This paper analyzes the decision by a government facing electoral uncertainty to implement structural reforms in the presence of fiscal restraints similar to the Stability and Growth Pact. To the extent that the reform package entails budgetary costs, the model shows that a fiscal pact erodes...

This paper proposes a probabilistic approach to public debt sustainability analy-sis (DSA) using "fan charts." These depict the magnitude of risks-upside and downside-surrounding public debt projections as a result of uncertain economic conditions and policies. We propose a simulation algorithm...

This paper proposes a probabilistic approach to public debt sustainability analy-sis (DSA) using "fan charts." These depict the magnitude of risks-upside and downside-surrounding public debt projections as a result of uncertain economic conditions and policies. We propose a simulation algorithm...