Through a comparative dynamic analysis, we argue that the reality of public debt issuance, which responds flexibly to business cycles in contrast to the EU’s institutionally prescribed fiscal discipline, may contribute to macroeconomic stabilization. Through a simple econometric analysis, we...

This paper presents a stock-flow-consistent model in which growth is led by exports and government expenditure. It considers domestic and external debt dynamics and gross capital flows. Countries may choose to not fully use their external space to accumulate international reserves. The model is...