In the aftermath of the recent financial crisis and recession, governments' actions around the world suggest a non-linear responsiveness of fiscal policy to debt. Additionally, governments are realizing that they face fiscal limits on the size of debt that they can repay. The fiscal limits arise...

In the aftermath of the recent debt crisis, many countries are implementing nonlinear fiscal policy rules, whereby the government’s responsiveness to debt must strengthen at higher levels of debt. This paper examines how a nonlinear fiscal policy rule affects the possibility of future...