Using a large panel of OECD countries this paper studies the link between debt and macroeconomic stability by comparing the evolution of balance sheet aggregates and economic output in high- and lowdebt environments. While the relationship between debt and economic growth has been extensively...

This paper investigates the effect of structural characteristics on debt limits of middle income countries. Two equations relate the probability of default to the interest rate. First, the probability of default is estimated with a logit model. Second, the assumption of non-arbitrage opportunity...

This paper provides robust empirical evidence that government effectiveness is a key determinant of sovereign defaults. Government effectiveness is measured by a broad-based perception index of the Worldwide Governance Indicators database (WGI) disseminated by the World Bank. Public debt and...

This study investigates transition finance in Lebanon, an upper middle-income country in the MENA region transitioning from a significant adverse shock. Lebanon’s development path has been historically non-linear and, most recently, the Syrian conflict adversely affected the country’s...