Identifying Countries at Risk of Fiscal Crisis: High-Debt Developed Countries
Bibliographic record
Abstract
How large can debt get before triggering a crisis? Since debt is the expected present value of future primary surpluses, the answer depends on a country’s technical and political ability to raise future primary surpluses. However, countries do not raise the primary surplus to its peak and maintain the peak forever, the assumption implicit in the standard practice of setting maximum debt at the present value of the peak surplus. We estimate fiscal feedback rules for seven high-debt developed countries and find an increase in debt creates a sustained increase in the primary surplus, with the primary surplus reaching a peak in the future. Therefore, our implied debt limit is much lower than the standard measure. We estimate debt limits following the global financial crisis in 2008 and find substantial heterogeneity. We separate countries into risk categories based on fiscal space. Greece and Portugal eroded their fiscal space several years, prior to their fiscal crises, placing them in the highest risk category and predicting the crises that followed. Canada and Belgium maintained large enough fiscal space to achieve safe status. Other countries reduced fiscal space, with France and Spain eroding fiscal space in 2014, warning of future crises.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.003 | 0.001 |
| Meta-epidemiology (narrow) | 0.001 | 0.001 |
| Meta-epidemiology (broad) | 0.002 | 0.000 |
| Bibliometrics | 0.001 | 0.000 |
| Science and technology studies | 0.000 | 0.001 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.001 | 0.003 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.001 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; both teacher heads agree on what is shown here.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".