The developing international debt crisis has unleashed unanticipated fears that more governments in some advanced economies may default on their sovereign debt and trigger a global financial tsunami. This article provides a primer on sovereign debt sustainability and interprets the recent experience of advanced economies in the light of a uniform approach that allows an answer to this question: What are the main factors that contribute to making a country’s debt sustainable or unsustainable?

NOTE: A previous version of this article contained an error on page 212, which has been corrected in this version.