Public Debt Dynamics and Risk Assessment under Uncertainty

Managing public debt requires more than simple deterministic projections; it demands a clear understanding of how real-world volatility impacts fiscal sustainability. This course provides a comprehensive introduction to analyzing public debt dynamics when economic conditions are unpredictable. You will learn how to move beyond static models and evaluate fiscal vulnerability under various risk scenarios. By the end of this course, you will be able to construct robust debt projection frameworks, run sensitivity analyses, and interpret risk indicators to support sound fiscal policy decisions. What you will learn: Understand the foundational macroeconomic formulas that govern public debt accumulation over time; Analyze how fluctuations in GDP growth, real interest rates, and exchange rates impact debt-to-GDP ratios; Construct fan charts and stochastic projections to visualize risk and uncertainty; Apply stress testing methodologies to evaluate fiscal resilience under severe economic shocks; Evaluate the role of primary balances and fiscal policy rules in stabilizing debt trajectories. The course begins with core terminology, debt formulas, and foundational concepts before guiding you through practical risk-modeling techniques and scenario analysis. This course is designed for beginners in fiscal analysis, public finance students, and policy enthusiasts, with no advanced mathematical prerequisites required. Start building your fiscal modeling and risk assessment skills today.