ECON 539
Debt Sustainability Spring 2024
Division II

Class Details

The stock of government debt has skyrocketed in many countries. At the same time, interest rates have risen as global central banks have sought to tame inflation, generating concerns about the sustainability of public debt, especially in many lower-income and emerging market economies. What does fiscal/debt sustainability mean, and what are the implications of high public debt for growth and stability? How do the IMF and other institutions assess a country’s public debt sustainability? How does uncertainty factor into these assessments, and what special considerations are relevant for natural resource exporters? How have governments sought to bring down high levels of debt, or to prevent excessive debt levels from arising in the first place? Do these approaches need to be modified to account for the impact of COVID on debt stocks? How will demographic developments and climate change affect debt sustainability? By addressing these questions, the course will seek a nuanced understanding of the role of public debt in the economy and its benefits and risks.
The Class: Format: tutorial; Students will meet the professor in pairs, approximately one hour each week.
Limit: 10
Expected: 10
Class#: 4017
Grading: no pass/fail option, no fifth course option
Requirements/Evaluation: During a typical week one student in the pair will write a short paper, and the other will respond. The following week the roles will be reversed. Evaluation will be based on the papers written as well as the responses.
Prerequisites: For CDE Fellows: fall semester courses. For undergraduates: Econ 251, Econ 252, and Econ 255, or permission of instructor.
Enrollment Preferences: CDE Fellows, Economics majors.
Distributions: Division II

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