When Is External Debt Sustainable?

This paper examines the determinants of "debt distress," which they define as periods in which countries resort to exceptional finance in any of three forms: (1) significant arrears on external debt, (2) Paris Club rescheduling, and (3) nonconcessional International Monetary Fund lending....

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Bibliographische Detailangaben
Hauptverfasser:	Nehru, Vikram, Kraay, Aart
Format:	Buch
Sprache:	eng
Schlagworte:	BENCHMARK BORROWING BORROWING POLICIES CREDITOR CREDITORS CURRENCY UNITS DEBT DEBT BURDEN DEBT CRISES DEBT DISTRESSED COUNTRIES DEBT OUTSTANDING DEBT PROBLEMS DEBT REDUCTION DEBT RELIEF DEBT RESCHEDULING DEBT SECURITIES DEBT SERVICE DEBT SERVICE PAYMENTS DEBT SERVICING DEBT STOCKS DEBT STRATEGY DEBT SUSTAINABILITY DEBTOR DEBTOR COUNTRIES DEBTOR REPORTING DEBTS DEFLATORS DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXPORTS EXTERNAL DEBT FACE VALUE FINANCIAL CRISIS FISCAL YEAR GROWTH RATE HEAVILY INDEBTED POOR COUNTRIES IMPORTANCE OF LIQUIDITY IMPORTS INCOME INCOME EFFECT INCOME INEQUALITY INFLATION INFLATION RATE INTEREST RATES INTERNATIONAL MONETARY FUND BALANCE OF PAYMENTS INTERNATIONAL RESERVES LENDING LIQUIDITY LONG TERM DEBT MACROECONOMIC STABILITY PARIS CLUB PAYMENTS IMBALANCES PER CAPITA INCOME PRESENT VALUE PRESENT VALUE OF DEBT PROBABILITY OF DEFAULT PROPERTY RIGHTS PUBLIC SERVICES REAL GDP REGRESSION ANALYSIS REPAYMENT SECONDARY MARKETS SOLVENCY SOVEREIGN DEBT SOVEREIGN RISK SOVEREIGN RISK RATINGS TERMS OF TRADE TRADEOFFS
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Beschreibung
Zusammenfassung:	This paper examines the determinants of "debt distress," which they define as periods in which countries resort to exceptional finance in any of three forms: (1) significant arrears on external debt, (2) Paris Club rescheduling, and (3) nonconcessional International Monetary Fund lending. Using probit regressions, the authors find that three factors explain a substantial fraction of the cross-country and time-series variation in the incidence of debt distress: the debt burden, the quality of policies and institutions, and shocks. They show that these results are robust to a variety of alternative specifications, and that their core specifications have substantial out-of-sample predictive power. The authors also explore the quantitative implications of these results for the lending strategies of official creditors.