ABSTRACT
To combat the recession that accompanied the global financial crisis (GFC), most major countries supplemented automatic fiscal stabilizers with discretionary fiscal stimulus packages. While the global economy has started to recover, these packages, combined with the costs of financial sector and other bailouts and sharp output and revenue losses, have left many countries with large public debt burdens as a long-lasting legacy of the crisis. This is especially true of the United States (US) and several European countries. As noted by Reinhart and Rogoff (2011), the global economy moved from a financial crash to a debt crisis, although Asia was not at the epicenter of the GFC, nor is it at the center of the subsequent debt crisis.
