This paper develops a framework to decompose the change in New Zealand's public debt ratio into four component effects: the primary balance, real GDP growth, real interest rates, and exchange rates. We study New Zealand's debt dynamics over three periods: the decade after the Global Financial...

The objective of this research was to demonstrate the (nonlinear) risks of sovereign insolvency and explore the applicability of stochastic modeling in public debt management, given a structural economic model of stochastic government debt dynamics. A stochastic optimal control model was...