Public debt sustainability. Notes on debt sustainability, development of a domestic governmet securities market and financial risks

Abstract

The paper focuses on debt management, and examines the concept of debt sustainability as defined by different authors and applied by the IMF. However, proposes a new definition and a different approach. Assessment procedures for the new approach are suggested as also some actions to develop a government securities market. In the last part, it proposes an interpretation of Mexico’s 1982 and 1994-95 crises, as a result of two factors, the overlooking of basic financial risks and a poor conception of debt sustainability.