F&D Magazine: Stabilizing Debt in Advanced Economies

Countries must shift toward fiscal discipline and reforms that raise long-term growth

Stabilizing Debt in Advanced Economies MARCH 2026  Stabilizing Debt in Advanced Economies MARCH 2026  (Credit: Getty Images/MirageC) (Credit: Getty Images/MirageC) Many highly indebted advanced economies including France, the United Kingdom, and the United States face a grim fiscal future, Zsolt Darvas and Jeromin Zettelmeyer write in F&D.   Financial markets have been forgiving so far, but recent tremors suggest that they may become more sensitive to negative news about the fiscal or economic outlook, making the job of reducing debt that much harder, the authors write.   “What will it take to stabilize debt ratios?” Many highly indebted advanced economies including France, the United Kingdom, and the United States face a grim fiscal future, Zsolt Darvas and Jeromin Zettelmeyer write in F&D.   Financial markets have been forgiving so far, but recent tremors suggest that they may become more sensitive to negative news about the fiscal or economic outlook, making the job of reducing debt that much harder, the authors write.   “What will it take to stabilize debt ratios?” Read more The Debt Reckoning The Debt Reckoning (Credit: Joey Guidone) (Credit: Joey Guidone) High Debt, Hard Choices | Mounting public debt and rising interest rates are stretching finances and forcing difficult decisions | Era Dabla-Norris and Rodrigo Valdes   Policy Coordination for Fractured Times | Unstable geopolitics complicates effective coordination of fiscal and monetary policy | Giancarlo Corsetti and Leonardo Melosi   Safeguarding the Treasury Market | The Federal Reserve needs new tools to intervene during future stress | Anil K Kashyap and Jeremy C. Stein   The Debt-Inequality Cycle | Extreme inequality is fueling a global debt crisis | Atif Mian   The New Face of African Debt| Shifts from external to domestic debt come with rewards and risks | Amadou Sy and Athene Laws   Debt Reduction Lessons from Jamaica | Credible institutions and consensus building led to halving public debt | Barry Eichengreen, Serkan Arslanalp and Peter Blair Henry High Debt, Hard Choices | Mounting public debt and rising interest rates are stretching finances and forcing difficult decisions | Era Dabla-Norris and Rodrigo Valdes   Policy Coordination for Fractured Times | Unstable geopolitics complicates effective coordination of fiscal and monetary policy | Giancarlo Corsetti and Leonardo Melosi   Safeguarding the Treasury Market | The Federal Reserve needs new tools to intervene during future stress | Anil K Kashyap and Jeremy C. Stein   The Debt-Inequality Cycle | Extreme inequality is fueling a global debt crisis | Atif Mian   The New Face of African Debt| Shifts from external to domestic debt come with rewards and risks | Amadou Sy and Athene Laws   Debt Reduction Lessons from Jamaica | Credible institutions and consensus building led to halving public debt | Barry Eichengreen, Serkan Arslanalp and Peter Blair Henry “There are few elegant, easy, or politically palatable ways to reduce debt” – F&D editor in chief Gita Bhatt “There are few elegant, easy, or politically palatable ways to reduce debt” – F&D editor in chief Gita Bhatt Read more Point of View Point of View (Credit: Chantal Jahchan) (Credit: Chantal Jahchan) Worlds Apart | There are ways to narrow the gap between economics and politics | Alan S. Blinder   America’s Perilous Fiscal Path| It’s easier to explain how the US got into its fiscal difficulties than how it will get out of them | Alan J. Auerbach   AI Can Lift Global Growth| But lasting productivity benefits depend on how fast we learn to measure, finance, and govern it | Marcello Estevão Worlds Apart | There are ways to narrow the gap between economics and politics | Alan S. Blinder   America’s Perilous Fiscal Path| It’s easier to explain how the US got into its fiscal difficulties than how it will get out of them | Alan J. Auerbach   AI Can Lift Global Growth| But lasting productivity benefits depend on how fast we learn to measure, finance, and govern it | Marcello Estevão Also Featured Also Featured (Credit:Brian Rea) (Credit:Brian Rea) Digital Infrastructure | Finance ministries must think about digital public infrastructure as they do roads and power grids | Diane Coyle, David Eaves and Beatriz Vasconcellos   Old Laws for New Machines | Science fiction writer Isaac Asimov’s robot principles offer an ethics guide for AI in finance | Biagio Bossone   Taxing Harmful Habits | Taxes on smoking, drinking, and sugar should better align with the harm they cause | Christoph B. Rosenberg and Marius van Oordt   How to Promote the Wealth of Nations| Adam Smith’s philosophy still sheds light on how economies grow, trade, and respond to change | Michael Spence Digital Infrastructure | Finance ministries must think about digital public infrastructure as they do roads and power grids | Diane Coyle, David Eaves and Beatriz Vasconcellos   Old Laws for New Machines | Science fiction writer Isaac Asimov’s robot principles offer an ethics guide for AI in finance | Biagio Bossone   Taxing Harmful Habits | Taxes on smoking, drinking, and sugar should better align with the harm they cause | Christoph B. Rosenberg and Marius van Oordt   How to Promote the Wealth of Nations| Adam Smith’s philosophy still sheds light on how economies grow, trade, and respond to change | Michael Spence Our Regular Departments Our Regular Departments (Credit: Getty Images/Joseph Clark) (Credit: Getty Images/Joseph Clark) Katherine Baer and Ruud de Mooij explain why raising tax revenue is central to economic development for Back to Basics   For People in Economics, Jeff Kearns profiles Harvard’s Myrto Kalouptsidi, who is decoding how shipping and industrial policy shape the global economy   National success in the AI age isn’t just about technology, it’s about workers that are ready to use it, we show in Picture This   Bank of Korea Governor Chang Yong Rhee explains the institution’s evolving role amid broadening economic challenges for In the Trenches   For Books, Catherine R. Schenk reviews Money Beyond Borders: Global Currencies from Croesus to Crypto by Barry Eichengreen   Prakash Loungani reviews 1929: Inside the Greatest Crash in Wall Street History–and How It Shattered a Nation by Andrew Ross Sorkin   And Melanie W. Sisson reviews Breakneck: China’s Quest to Engineer the Future by Dan Wang   Currency Notes tells how Bhutan, the only nation with happiness as a formal government policy, updates its Ngultrum Katherine Baer and Ruud de Mooij explain why raising tax revenue is central to economic development for Back to Basics   For People in Economics, Jeff Kearns profiles Harvard’s Myrto Kalouptsidi, who is decoding how shipping and industrial policy shape the global economy   National success in the AI age isn’t just about technology, it’s about workers that are ready to use it, we show in Picture This   Bank of Korea Governor Chang Yong Rhee explains the institution’s evolving role amid broadening economic challenges for In the Trenches   For Books, Catherine R. Schenk reviews Money Beyond Borders: Global Currencies from Croesus to Crypto by Barry Eichengreen   Prakash Loungani reviews 1929: Inside the Greatest Crash in Wall Street History–and How It Shattered a Nation by Andrew Ross Sorkin   And Melanie W. Sisson reviews Breakneck: China’s Quest to Engineer the Future by Dan Wang   Currency Notes tells how Bhutan, the only nation with happiness as a formal government policy, updates its Ngultrum   Nick Owen   Nick Owen  Managing Editor | Finance & Development  Managing Editor | Finance & Development   nowen@IMF.org   nowen@IMF.org Stay connected with the International Monetary Fund:       Manage Subscriptions | Unsubscribe All