RT Journal Article
T1 Debt spikes, blind spots, and financial stress
A1 Jaramillo, Laura
A1 Mulas Granados, Carlos
A1 Jalles, Joao Tovar
AB Are blind spots of public debt spikes sizable? And how do they affect financial stress indicators? This paper tackles these questions empirically, using information from 179 episodes of public debt spikes between 1945 and 2014. We find that large public debt spikes are neither driven by high primary deficits nor by output declines but instead by stock‐flow adjustments. These blind spots in debt dynamics are sizable in both advanced economies and emerging markets and could amount to more than 20% of gross domestic product in the median episode. These public debt spikes increase financial stress indicators significantly, in particular when a large share of public debt is held by domestic commercial banks. Enhanced transparency and better debt forecasting tools could help address financial market tensions resulting from blind spots in debt dynamics.
PB Wiley-Blackwell
SN 1099-1158
YR 2017
FD 2017
LK https://hdl.handle.net/20.500.14352/18826
UL https://hdl.handle.net/20.500.14352/18826
LA eng
DS Docta Complutense
RD 14 abr 2025