Analysis of public debt in developing countries has traditionally focused on external debt. However, in recent years, several developing countries adopted aggressive policies aimed at retiring public external debt and substituting it with domestically issued debt. This paper discusses...

The global crisis and the expansionary government reaction in many countries has revamped the attention of policy makers and academics on the growth effects of large public debts. Recent empirical studies investigate the impact of public debt on growth in advanced and emerging countries. This...

This working paper was written by Refet S. Gürkaynak (Bilkent University, CEPR, CESifo and CFS), Sang Seok Lee (Bilkent University and CEPR), Paul Luk (Hong Kong Institute for Monetary and Financial Research) and Ju Hyun Pyun (Korea University Business School).We study the joint behaviour of...

Using a unique loan-level dataset from the World Bank’s Debtor Reporting System, we construct new measures of external debt shocks for 120 low- and middle-income countries during the 1975-2018 period. We identify the shock in two steps by first calculating the difference between actual and...

The sovereign debt literature of the 1980s made the important point that lenders to a sovereign country will impose a credit ceiling on their lending, because at a sufficiently high level of debt the country will find it less onerous to default than to keep on servicing its debt. Provided that...

This paper investigates the relationship between external debt and economic growth in poor countries. The adverse effects of external debt on economic performance are due to the crowding out of public investment and to the disincentive effects, because of debt overhang and uncertainty....

This paper analyzes the different implications of denominating foreign debt in a tradable or in a nontradable good, analogous to foreign currency and a local price index respectively. While the price of tradables is exogenous to a small open economy, the price of nontradables reacts to the...

This study explores the impact of commodity price volatility on external debt accumulation under fixed, managed, and floating regimes. We estimate dynamic panel data models for 97 countries from 1993 to 2016. Our empirical findings show that commodity price volatility increases external debt...

There are growing concerns that 25 years after the launch of the HIPC debt relief initiative, many low-income countries are again facing high debt vulnerabilities. This paper compares debt vulnerabilities in LICs today versus those on the eve of the HIPC Initiative and examines challenges to a...

This paper presents a critical approach to the policy debate about external debt sustainability and debt relief in the High Indebted Poor countries (HIPC). The authors look at the different approaches to and models of debt sustainability and claim that a realistic evaluation of this issue...