How Fiscal Rules Can Reduce Sovereign Debt Default Risk

December 11, 2020  

By Oscar Valencia, Jose E. Gomez-Gonzalez, Gustavo A. Sánchez. 

The COVID crisis has generated an unprecedented fiscal response as the total resources assigned to attend the pandemic globally has reached $11 trillion, according to the World Economic Forum. Latin America and the Caribbean (LAC) has not been an exception. Taken together, the announced measures in LAC amount, on average[1], to 8 percent of the region’s GDP as stated by the IMF. 

Read more...