An optimal tax and borrowing plan determines the marginal cost of servicing government debt, p', and makes the government’s debt risk-free. An option to default restricts debt capacity. Optimal debt-GDP ratio dynamics are driven by 1) a primary deficit, 2) interest payments, 3) GDP growth, and 4) hedging costs. Hedging influences debt capacity and debt transition dynamics. For plausible parameter values, we make comparative dynamic quantitative statements about debt-GDP ratio transition dynamics, debt capacity, and how long it would take our example economy to attain that calibrated equilibrium debt capacity.

We build a two-country general equilibrium model to analyze the effects of cross-border data flows and pre-existing development gaps in data economies on each country's production and international trade. Raw data as byproducts of consumption can be transformed into various types of working data (information) to be used by both domestic and foreign producers. Because data constitute a new production factor for intermediate goods, a large extant divide in data utilization can reduce or even freeze trade. Cross-border data flows mitigate the situation and improve welfare when added to international trade. Data-inefficient countries where data are less important in production enjoy a ``latecomer's advantage'' with international trade and data flows, contributing more raw data from which the data-efficient countries generate knowledge for production. Furthermore, cross-border data flows can reverse the cyclicity of working data usage after productivity shocks, whereas shocks to data privacy or import costs have opposite effects on domestic and foreign data sectors. The insights inform future research and policy discussions concerning data divide, data flows, and their implications for trade liberalization, the data labor market, among others.