Willem Buiter (1985, 1993) significantly extended the theory by arguing that fiscal
sustainability must go beyond cash flows to include the net wealth of the public sector. His
work explored conditions under which government borrowing could breach solvency, even
if standard IBC indicators appeared favourable. Buiter (2001) later advocated for accrual-
based fiscal rules and net worth tracking, marking a shift from traditional flow measures to
stock-based analysis. In a similar vein, Blanchard et al. (1990) advanced the use of
forward-looking fiscal indicators, such as the primary gap and tax gap, as tools to assess
the adequacy of fiscal policy in stabilising debt-to-GDP ratios. These indicators are
particularly relevant in economies experiencing macroeconomic volatility.
