This paper argues that asset price cycles have significant effects on fiscal outcomes. In particular, there is evidence of debt bias-the tendency of debt to increase over the cycle- that is significantly larger for house price cycles than stand-alone business cycles. Automatic stabilizers and...

This paper provides a tractable framework to assess how the structure of debt instruments-specifically by currency denomination and indexation to GDP-can raise the debt limit of a sovereign. By calibrating the model to different country fundamentals, it is clear that there is no...

This paper presents a novel approach to detail the propagation of shocks to public debt. The modeling technique involves a structural vector auto-regression (SVAR) estimator with an endogenous debt accumulation equation. It explores how the main drivers of sovereign debt dynamics - the primary...