This paper explores empirically how the adoption of IMF programs affects sovereign risk over the medium term. We find that IMF programs significantly increase the probability of subsequent sovereign defaults by approximately 1.5–2 percentage points. These results cannot be attributed to...

This paper explores empirically how the adoption of IMF programs affects sovereign risk over the medium term. We nd that IMF programs signifcantly increase the probability of subsequent sovereign defaults by approximately 1.5 to 2 percentage points. These results cannot be attributed to...

This paper explores empirically how the adoption of IMF programs affects sovereign risk over the medium term. We find that IMF programs significantly increase the probability of subsequent sovereign defaults by approximately 1.5 to 2 percentage points. These results cannot be attributed to...

This paper studies whether IMF programs and their size affect borrowing costs by comparing the coupon of bonds issued around an IMF arrangement. By comparing bonds issued immediately before the inset of the program with bonds issued immediately after the program, we show that, on average, the...

We analyze the determinants of IMF lending since the early nineties, a period during which the roles of financial cycles and interconnectedness as amplifiers and transmitters of economic crises have gained prominence. First, we show that the global financial cycle is an important driver of IMF...

According to the IMF, the current public debt makes up nearly 40 percent of the global debt, marking the highest share since the mid-1960s. Despite the vast research on alarming levels of sovereign default, the literature remains inconclusive. This paper investigates macroeconomic, financial,...

International financial institutions (IFIs) generally enjoy preferred creditors treatment (PCT). Although PCT rarely appears in legal contracts, when sovereigns restructure bilateral or commercial debts, they normally pay IFIs in full. This paper presents a model where a creditor, such as an...

The paper identifies key features of International Monetary Fund (IMF)-supported programs following the 2008 global financial crisis. The statistical analysis of a large sample of countries that borrowed from the IMF during 1997-2013 indicates that, compared to the amount of financing provided...

Using panel data for 106 countries in 1971-1997, we estimate generalized least squares regressions to explain IMF lending as well as monetary and fiscal policies in the recipient countries. With respect to moral hazard, we find that a country's rate of monetary expansion and its government...

Sovereign debt crises are difficult to solve. This paper studies the "holdout problem", meaning the risk that creditors refuse to participate in a debt restructuring. We document a large variation in holdout rates, based on a comprehensive new dataset of 23 bond restructurings with external...