In this paper I analyze the relationship between fiscal policy, aggregate public sector debt sustainability, and debt relief. I develop a methodology to compute the fiscal policy path that is compatible with aggregate debt sustainability in the post-HIPC era. The model explicitly considers the...

In this paper I analyze the relationship between fiscal policy, aggregate public sector debt sustainability, and debt relief. I develop a methodology to compute the fiscal policy path that is compatible with aggregate debt sustainability in the post-HIPC era. The model explicitly considers the...

For dozens of developing countries, the financial upheavals of the 1980s have set back economic development by a decade or more. Poverty in those countries have intensified as they struggle under the burden of an enormous external debt. In 1988, more than six years after the onset of the crisis,...

For dozens of developing countries, the financial upheavals of the 1980s have set back economic development by a decade or more. Poverty in those countries has intensified as they struggle under the burden of an enormous external debt. In 1988, more than six years after the onset of the crisis,...

In this paper I develop a model to investigate the connection between debt relief and current account sustainability. This model can be used as a key input in assessing whether a HIPC country's real exchange rate is 'overvalued,' and will thus need to go through devaluation. The working of the...

I use data on 180 sovereign defaults to analyze what determines the recovery rate after a debt restructuring process. Why do creditors recover, in some cases, more than 90%, while in other cases they recover less than 10%? I find support for the Grossman and Van Huyk model of “excusable...