Economists have traditionally used a simple rule that restricts primary deficits to less than a threshold given by the interest rate growth rate differential and existing debt level to judge fiscal sustainability. This rule derives from a single period application of the government's budget...

We find evidence of a non-linear relationship between stock-flow adjustmentsand debt levels that is different for low- and high-debt economies. Stockflowadjustments are largely a by-product of efficient public debt management.We study an alternative measure of interest costs on debt —...