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In this paper, we define deficit sustainability by requiring formally that both the discounted debt vanish asymptotically and the undiscounted debt be bounded. Thus, a new necessary condition and a new testing procedure emerge. We propose a new test statistic and prove that its limiting distribution is standard normal, N (0, 1). Its finite-sample distribution differs from N (0, 1), however, mainly because it has fat tails, so we derive empirical critical values using simulations. Using the newdoi:10.26268/heal.uoi.10697 fatcat:hibb77udbfh6xesxy75yglpd5e