This paper studies the effect of sovereign debt restructurings with external private creditors on growth during the period 1970-2010. We find that there are bad and good (or not so bad) debt restructurings for growth. While growth generally declines in the aftermath of a sovereign debt...

How costly are sovereign debt crises? In this paper we study output losses during sovereign default and debt renegotiation episodes since 1980. In contrast to previous work, we account for the severity of default and not only for its occurrence. Specifically, we distinguish between "hard" and...

Debt in emerging market and developing economies (EMDEs) is at its highest level in half a century. In about nine out of 10 EMDEs, debt is higher now than it was in 2010 and, in half of the EMDEs, debt is more than 30 percentage points of gross domestic product higher. Historically, elevated...

This study highlights the role of political leadership in external debt management by translating its effectiveness into economic growth. We use data from World Development Indicators (2018), Archigos (version 4.1) for Goemans et al. (2009) and Scartascini et al. (2021) from 1975 to 2019. The...

In theory, the underlying logic entails that, a country should borrow as long as the capital thus acquired produces a rate of return that is higher than the cost of the foreign borrowing. In that event, the economy of the borrowing country will result in increased capacity coupled with expanding...

Sound and efficient external debt sustainability is an essential instrument to shred the notoriety of indebtedness and to ameliorate economic growth. This study was conducted with an objective to examine the determinants of foreign debt sustainability in Ethiopia using a yearly time series data...

We use a dynamic small open economy model to explore the macroeconomic impact of alternative public investment scaling-up scenarios, analyzing how improving the efficiency of capital spending and of tax revenue collection affect growth and debt sustainability for three fast-growing Southeast...

Over the past few years, external debt positions of South Asian economies have increased to alarming levels, indicating that those countries are more likely to be exposed to a debt crisis. Given the low domestic savings rate of these economies, they are increasingly compelled to invest...

This paper investigates the relationship between external indebtedness and economic growth, with a particular attention to LICs, for which the theoretical arguments of debt overhang and liquidity constraint have to be reconsidered. The estimation of a growth model, with a panel of 121 developing...

This paper studies the impact of debt default on economic growth taking into account the depth of a debt restructuring. More specifi cally, creditors losses (or haircuts) are used as proxies of the severity of the default episoded. Analyzing 89 defaults in 72 countries over the period 1979-2005,...