With public debt soaring across the world, a growing concern is whether current debt levels are a harbinger of fiscal crises, thereby restricting the policy space in a downturn. The empirical evidence to date is however inconclusive, and the true cost of debt may be overstated if interest rates...

The Coronavirus disease (COVID-19) triggered a sharp contraction of economic activity across Asia and the Pacific. Policymakers adopted a 'whatever it takes' approach in their initial response, relying mainly on liquidity support to help firms survive the shock. This paper discusses how the...