Fiscal Scape (Ostry, Ghosh, Kim and Qureshi)

Fiscal Space by Jonathan D. Ostry, Atish R. Ghosh, Jun I. Kim, and Mahvash S. Qureshi, published by IMF. This note reexamine the issue of debt sustainability in a large group of advanced ecomomies. For them hypothesis is that, when debt is in a moderate range, its dynamics are sustainable in the sense that increases in debt elicit sufficient increases in primary fiscal balances to stabilize  the debt-to-GDP ratio.