02192cas a2200265 a 4500 AALejournalIMF004042 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451863277 1018-5941 BD-DhAAL BD-DhAAL Celasun, Oya. Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries : A "Fan-Chart" Approach / Oya Celasun, Xavier Debrun, Jonathan Ostry. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (54 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper proposes a probabilistic approach to public debt sustainability analysis (DSA) using "fan charts." These depict the magnitude of risks-upside and downside-surrounding public debt projections as a result of uncertain economic conditions and policies. We propose a simulation algorithm for the path of public debt under realistic shock configurations, combining pure economic disturbances (to growth, interest rates, and exchange rates), the endogenous policy response to these, and the possible shocks arising from fiscal policy itself. The paper emphasizes the role of fiscal behavior, as well as the structure of disturbances facing the economy and due to fiscal policy, in shaping the risk profile of public debt. Fan charts for debt are derived from the "marriage" between the pattern of shocks on the one hand and the endogenous response of fiscal policy on the other. Applications to Argentina, Brazil, Mexico, South Africa, and Turkey are used to illustrate the approach and its limitations. Mode of access: Internet Debrun, Xavier. Ostry, Jonathan. IMF Working Papers; Working Paper ; No. 2006/067 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/067/001.2006.issue-067-en.xml IMF e-Library