ABSTRACT
It is quite hard to define precisely a fiscal crisis. Fiscal crises are often associated with severe social or external problems, such as revolutions and wars. In those situations fiscal deficits soar, and public debt consequently explodes. However, defaults of domestic public debt are very rare, in contradistinction to defaults on foreign debt.2 For that reason we will define a fiscal crisis as a situation in which public deficit is high and debt grows fast for a relatively long period.3
