Public Debt Dynamics Under Uncertainty (DDUx)

Source details

Session No.: OL 24.146
Location: Course conducted online
Date: May 1, 2024 - April 15, 2025 (50 weeks)
Delivery Method: Online Training
Primary Language: English
Registration status: Deadline passed
Qualifications: Some knowledge of economics would be helpful. Basic Microsoft Excel skills and access to a computer with a reliable internet connection and a Google Chrome web browser are essential.

All government officials are welcome to register.
Particularly useful for officials from ministries of finance, debt agencies, central banks, and other government agencies responsible for providing advice or implementing macroeconomic and debt policies.

The training program is presented jointly by the Institute for Capacity Development and the Fiscal Affairs Department.
Focus: overview of how to assess public debt dynamics under uncertainty.
Core conceptual topics:
- How to think about public debt projections when acknowledging uncertainty about key variables underlying debt projections (GDP growth, interest and exchange rates, and primary balances).
- Concepts of maximum debt limit (level of debt beyond which there could be 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).
- Use of fan charts as graphical tools to describe uncertainty about the evolution of a variable over time.
- How to use fan charts to derive a safe level of debt and how to assess fiscal risks.
Practical skills emphasized:
- Produce and interpret fan charts.
- Produce fan charts through simple Monte Carlo simulations.
- Produce fan charts using VAR models and fiscal reaction functions.

Explain what a fan chart of debt is and interpret a fan chart to identify risks to public debt dynamics.
Understand how to produce fan charts through simple Monte Carlo simulations.
Understand how to produce fan charts using VAR models and fiscal reaction functions.
Understand the concept of safe debt and maximum debt limit.
Evaluate debt dynamics under uncertainty.

Duration: 50 weeks (May 1, 2024 - April 15, 2025).
Joint delivery by the Institute for Capacity Development and the Fiscal Affairs Department.
Emphasis on both conceptual understanding (safe debt, maximum debt limit, fiscal risks) and applied methods (Monte Carlo simulations, VAR models, fiscal reaction functions, fan charts).