The effects of debt relief on incentives to accumulate debt, consume, and invest are an important concern for donors and recipients. Using a dynamic stochastic general equilibrium model of a small open economy with a minimum consumption requirement and an endogenous relief probability, we show...

In this document we examine the rationale behind investments in emerging market debt, discuss opportunities for investment in the asset class, and review the various investment vehicles available to institutional investors. Meketa Investment Group believes that emerging market debt offers...

Mozambique has been one of the first highly indebted countries to obtain a debt reduction, in the framework of HIPC and enhanced HIPC initiative, and to implement a Poverty Reduction Strategy Paper. The process is still in its early stages, but it is already possible to investigate on the recent...

The G-8 Multilateral Debt Relief Initiative (MDRI) is the next step of the Highly Indebted Poor Countries Initiative (HIPC). There are two reasons why the MDRI is unlikely to help poor countries. First, the amount of money at stake is trivial. The roughly $2 billion of annual debt payments to be...

The G-8 Multilateral Debt Relief Initiative (MDRI) is the next step of the Highly Indebted Poor Countries Initiative (HIPC). There are two reasons why MDRI is unlikely to help poor countries. First, the amount of money at stake is trivial. The roughly $2 billion of annual debt payments to be...

Creditor countries and international organizations continue to disagree whether Greece should receive additional official debt relief, and if so how much. This paper first shows that these disagreements can be attributed to competing assumptions about Greece's future capacity to repay,...

This paper develops new error assessment methods to evaluate the performance of debt sustainability analyses (DSAs) for low-income countries (LICs) from 2005-2015. We find some evidence of a bias towards optimism for public and external debt projections, which was most appreciable for LICs with...

Is generalized debt relief an effective development strategy, or should assistance be tailored to countries' characteristics? To answer this question, the authors build a simple model in which recipient governments reveal their creditworthiness if donors offer them to choose between aid and debt...

The introduction of the Heavily Indebted Poor Countries (HIPC) initiative in 1996 established landmark legal and policy innovations both in the regulatory landscape of sovereign debt and in the framework of international development finance. As the HIPC framework draws to a close, this paper...

After a massive international campaign calling attention to the development impact of foreign debt, the Heavily Indebted Poor Countries (HIPC) initiative is now underway. But will the HIPC Initiative meet its high expectations? Will debt relief substantially raise growth? How do we make sure...