New approach reveals hidden risks in public debt sustainability for emerging markets
The article uses fan charts to show the risks surrounding public debt in emerging market countries. These charts help visualize the uncertainties in economic conditions and policies that affect debt levels. By simulating different economic shocks and policy responses, the researchers highlight how fiscal behavior and disturbances shape the risk profile of public debt. The study focuses on countries like Argentina, Brazil, Mexico, South Africa, and Turkey to demonstrate this approach and its limitations.