EU fiscal rules are meant to keep public finances on a sustainable path. This paper presents a new database that tracks numerical compliance with the four main rules of the Stability and Growth Pact starting in 1998. Our assessment of numerical compliance abstracts from the many exceptions and...

Monetary policy and fiscal policy are connected in various ways. This is why the adoption of the Euro as a common European currency has been accompanied by the setup of the European Union's Stability and Growth Pact, a framework for the coordination of the EU countries' fiscal policies. In this...

This note reviews Korea’s fiscal policy and public debt management, and discusses some of the constraints that bind the Bank of Korea in its conduct of monetary policy. Fiscal prudence and low public debt in Korea have allowed monetary policymakers to focus on inflation control without...

This paper investigates the inter-linkages between financial stability and fiscal policy. It analyzes the effect of selected financial stability indicators on the probability of future debt deterioration, controlling for several macroeconomic variables. We find significant evidence that a...

Despite four year of unprecedented fiscal consolidation efforts, Greece does not yet have (national) numerical fiscal rules, which could help contain primary expenditure and anchor expectations about public finances in Greece. This paper examines practical aspects associated with the...

This paper surveys the sovereign debt literature and summarizes the political economy trade-offs of seven distinct mechanisms for achieving debt sustainability. Two mechanisms – financial aid and asset exchange – are often underemphasized or entirely overlooked even though they can play an...

We extend previous work that combines the Value at Risk approach with estimation of the correlation pattern of the macroeconomic determinants of public debt dynamics by means of Vector Auto Regressions (VARs). These estimated models are used to compute the probability that the public debt ratio...

This paper examines UK sovereign debt sustainability following the Second World War. Even though the UK in 1946 recorded the highest public debt-to-GDP ratio of the 20th century, the sovereign credit literature does not show a UK sovereign default following the Second World War. New archival...

Over 11 months of 2015, regional debt growth came to nearly 5% against the turn of the year. Municipal debt growth during the same period constituted 1.5%. By the period-end for the entire year, the debt volume will increase further. However, growth rates, most likely, will slow down compared to...