{"version":"1.0","provider_name":"UNI FR","provider_url":"https:\/\/www.uni.lu\/fr","author_name":"UNI FR","author_url":"https:\/\/www.uni.lu\/fr","title":"A Theory of Debt Accumulation and Deficit Cycles","type":"rich","width":600,"height":338,"html":"<blockquote class=\"wp-embedded-content\" data-secret=\"wEfHE53KJV\"><a href=\"https:\/\/www.uni.lu\/fr\/events\/a-theory-of-debt-accumulation-and-deficit-cycles\/\">A Theory of Debt Accumulation and Deficit Cycles<\/a><\/blockquote><iframe sandbox=\"allow-scripts\" security=\"restricted\" src=\"https:\/\/www.uni.lu\/fr\/events\/a-theory-of-debt-accumulation-and-deficit-cycles\/embed\/#?secret=wEfHE53KJV\" width=\"600\" height=\"338\" title=\"\u00ab\u00a0A Theory of Debt Accumulation and Deficit Cycles\u00a0\u00bb &#8212; UNI FR\" data-secret=\"wEfHE53KJV\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" class=\"wp-embedded-content\"><\/iframe><script>\n\/*! This file is auto-generated *\/\n!function(c,d){\"use strict\";var e=!1,o=!1;if(d.querySelector)if(c.addEventListener)e=!0;if(c.wp=c.wp||{},c.wp.receiveEmbedMessage);else if(c.wp.receiveEmbedMessage=function(e){var t=e.data;if(!t);else if(!(t.secret||t.message||t.value));else if(\/[^a-zA-Z0-9]\/.test(t.secret));else{for(var r,s,a,i=d.querySelectorAll('iframe[data-secret=\"'+t.secret+'\"]'),n=d.querySelectorAll('blockquote[data-secret=\"'+t.secret+'\"]'),o=new RegExp(\"^https?:$\",\"i\"),l=0;l<n.length;l++)n[l].style.display=\"none\";for(l=0;l<i.length;l++)if(r=i[l],e.source!==r.contentWindow);else{if(r.removeAttribute(\"style\"),\"height\"===t.message){if(1e3<(s=parseInt(t.value,10)))s=1e3;else if(~~s<200)s=200;r.height=s}if(\"link\"===t.message)if(s=d.createElement(\"a\"),a=d.createElement(\"a\"),s.href=r.getAttribute(\"src\"),a.href=t.value,!o.test(a.protocol));else if(a.host===s.host)if(d.activeElement===r)c.top.location.href=t.value}}},e)c.addEventListener(\"message\",c.wp.receiveEmbedMessage,!1),d.addEventListener(\"DOMContentLoaded\",t,!1),c.addEventListener(\"load\",t,!1);function t(){if(o);else{o=!0;for(var e,t,r,s=-1!==navigator.appVersion.indexOf(\"MSIE 10\"),a=!!navigator.userAgent.match(\/Trident.*rv:11\\.\/),i=d.querySelectorAll(\"iframe.wp-embedded-content\"),n=0;n<i.length;n++){if(!(r=(t=i[n]).getAttribute(\"data-secret\")))r=Math.random().toString(36).substr(2,10),t.src+=\"#?secret=\"+r,t.setAttribute(\"data-secret\",r);if(s||a)(e=t.cloneNode(!0)).removeAttribute(\"security\"),t.parentNode.replaceChild(e,t);t.contentWindow.postMessage({message:\"ready\",secret:r},\"*\")}}}}(window,document);\n<\/script>\n","thumbnail_url":"https:\/\/www.uni.lu\/wp-content\/uploads\/sites\/11\/2026\/03\/03120045\/UNIV_SM-Profile_1600x1600px-scaled.jpg","thumbnail_width":2560,"thumbnail_height":2560,"description":"AbstractThis paper introduces a tractable model of sovereign debt in which governments face intertemporal tradeoffs between (i) preferring more primary deficits to less and (ii) avoiding costly defaults. Governments run deficits when debt and, then, the marginal costs of increasing debt are low. After an extended period of debt accumulation, the probability of default increases, and so do the marginal costs of running debt. Eventually, debt reaches a critical level relative to the size of the economy, a fiscal tipping point, after which debt accumulation stops, with governments cycling between deficits and surpluses, until perhaps a time of default. The main conclusions are that (i) fiscal tipping points typically occur at about 80-90% from default; (ii) the probability of future defaults increases with governments i\u0301myopia, macroeconomic stability, the ease at which defaulted governments re-gain access to capital markets (leading to \"serial defaulting\"), or debt markets illiquidity; (iii) fiscal austerity may arrive too late: \u201cdebt intolerance\u201d arises around the fiscal tipping point."}