This paper is a review of the different approaches on external debt sustainability. The Heavily Indebted Poor Country (HIPC) Initiative was launched to assure a permanent exit from debt dependence. However, the IMF-World Bank program is not without faults, in particular for what concerns debt...

The paper discusses and revisits some of the most popular stories behind the 2001 financial crisis in Argentina, i.e. the prolonged overvaluation of the peso owing to the Currency Board arrangement, the lack of fiscal adjustment, and the negative external environment which triggered a “sudden...

This paper builds upon the empirical literature on the macroeconomic impact of real exchange rate depreciations for a sample of 27 emerging economies. We find that real exchange rate depreciations tend to increase a country’s risk premium. This effect is neither linear nor symmetric: large...

The main objective of this paper is to study the relationship between external public debt and equilibrium real exchange rate in developing countries. Using a extension of Obstfeld & Rogoff (1995) model we show that debt overhang tend to appreciate real exchange rate in the long run (Krugman...

The main rationale for fiscal policy rules is the concern for long term sustainability of public finances, that in a monetary union may affect the other members. Among many other criticisms, the Stability and Growth Pact (SGP) has been seen as contradictory or incomplete because it focuses on...

We postulate a new method of identifying debt which we call Debt Burden (DB). We claim that DB reveals the true debt obligations of the fiscal authority. It is more accurate and transparent. Hence, DB would serve fiscal authority much better in policy making. It is powerful in a sense that it is...

This paper examines the growth pattern followed by the Chilean economy with reference to the macroeconomic reforms undertaken during the Pinochet regime, which were largely maintained by successive democratic administrations and partially reproduced by neighbouring countries. The focus is on the...

The purposes of this paper are twofold: first, it aims at critically evaluating the solvency criterion, pioneered by Hamilton and Flavin (1986), which is nowadays almost hegemonic in the analysis of public debt sustainability, and at illustrating alternative measures of sustainability grounded...

Congress asked GAO to estimate the value of FHA's Mutual Mortgage Insurance Fund, a capital reserve which backs most of FHA's single- family mortgages. This technical appendix presents estimates of the claim and non-claim termination propensities of single-family FHA mortgages. Competing risks...