The 2007 Report on Economic and Social Progress in Latin America analyzes the nature and evolution of sovereign debt in Latin America and discusses the policies that can be followed by countries and international financial institutions (IFIs) to reduce the vulnerabilities associated with it....

The 2007 Report on Economic and Social Progress in Latin America analyzes the nature and evolution of sovereign debt in Latin America and discusses the policies that can be followed by countries and international financial institutions (IFIs) to reduce the vulnerabilities associated with it....

This paper investigates empirically the linkages between corporate debt overhang and investment activity at the firm level for a cross section of large-sized emerging market and developing economies. It analyzes the extent to which investment may be discouraged by high levels of debt that put at...

This paper uses a difference-in-difference methodology similar to the one originally proposed by Rajan and Zingales (1998) to test whether defaulting hurts the more export-oriented industries. Strong support for this hypothesis was found, but contrary to the findings of previous studies, our...

Although credit rating agencies have gradually moved away from a policy of never rating a private borrower above the sovereign (the sovereign ceiling) it appears that sovereign ratings remain a significant determinant of the credit rating assigned to corporations. We examine this link using data...

While there is a substantial body of literature on the effects of quot;debt overhangquot; on investment in heavily-indebted countries, there is surprisingly little empirical work available on this subject. This paper tests the hypothesis that the stock of foreign debt acts as a disincentive to...

This paper evaluates the effect of foreign debt on investment in a heavily-indebted country, using numerical simulations of a simple rational expectations growth model. Two particular effects are distinguished. First, the effect due to quot;debt overhangquot; of pas t accumulated debts; and...

Even modest investment rates may achieve satisfactory rates of growth in the reforming economies of Eastern Europe because their relative capital scarcity implies high rates of productivity for capital. The most serious obstacle to private investment is uncertainty about the reform process,...

This paper analyzes the strategic role of investment from a debtor country`s perspective. The framework is one in which, if the debtor country is unable to meet debt obligations, a bargaining regime determines the amount of debt repayment. In the context of a two-country real trade model, debt...

The purpose of this study is to identify conditions under which renewed international lending will benefit both the developed and the developing countries. Our analysis will evaluate how the presence of terms of trade adjustment and distorted credit markets affect the conditions for the...