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International Monetary Fund

Public Debt Dynamics under Uncertainty

International Monetary Fund via edX

Overview

This online course, presented jointly by the Institute for Capacity Development and the Fiscal Affairs Department, provides an overview of how to assess public debt dynamics under uncertainty. That is, the course discusses how to think about public debt projections when we acknowledge uncertainty about the key variables that underly debt projections (GDP growth, interest and exchange rates, and primary balances).

This one-module course will allow you to produce and interpret fan charts (a graphical tool used to describe uncertainty about the evolution of a variable over time). The course will also present the concepts of maximum debt limit (level of debt surpassing which could have significant negative consequences for the economy) and safe debt (a level of debt sufficiently below the debt limit to provide a comfortable and prudent buffer). The course explains how to use fan charts to derive a safe level of debt and how to assess fiscal risks.

Taught by

Paolo Dudine and Leonardo Martínez

Reviews

4.0 rating, based on 1 Class Central review

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  • Overall, this was a very good course introducing simulations on public debt. It made the right balance between intuition and technical precisions to help beginners understand the results and implications of fan charts. Specifically, the course thou…

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