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The Dynamic Implications of Debt Relief for Low-Income Countries / Aleš Bulíř, Alma Romero-Barrutieta, Jose Daniel Rodríguez-Delgado.
- Format:
- Book
- Government document
- Author/Creator:
- Buliř, Aleš.
- International Monetary Fund, author.
- Series:
- IMF Working Papers; Working Paper ; No. 2011/157
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Debt relief--Developing countries--Econometric models.
- Debt relief.
- Debt relief--Econometric models.
- Physical Description:
- 1 online resource (28 p.)
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2011.
- Language Note:
- English
- Summary:
- 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 that excessive debt accumulation is consistent with an anticipation of a future debt relief. Simulations of the calibrated model using 1982-2006 Ugandan data suggest that debt-relief episodes are likely to have only a temporary impact on the level of debt in low-income countries, while being associated with more consumption and less invesment. The long-run debt-to-GDP ratio is estimated to be about twice as high with debt relief than without it.
- Contents:
- Cover; Contents; I. Introduction; II. The Debt Problem and the HIPC Initiatives; A. The Ugandan Experience with Debt Relief; III. The Model Economy; A. Environment; B. Technology; C. Preferences; D. The Debt-Relief Mechanism; E. The Household Problem; F. Rational Expectations Equilibrium and its Recursive Representation; IV. Simulation Results; A. Calibration; B. The Debt-Relief Scenario; C. The Scenario Without Debt Relief; D. Welfare Implications; V. Policy Experiments; A. The Debt-Relief Mechanism Responding to the Debt-to-GDP Ratio Only
- B. The Debt-Relief Mechanism Responding to Productivity Shocks OnlyVI. Conclusions; Appendix; References; Tables; 1. Parameter Values Used in Simulations; 2. Key Data to Be Matched in the Simulation with Debt Relief; 3. Summary of Simulation Results; Figures; 1. Debt-to-GDP Ratio of HIPCs at Completion Point; 2. Uganda: Debt Stocks and Disbursements, 1971-2011; 3. Debt-Relief Function; 4. Debt Ratio and Debt-Relief Episodes; 5. Productivity Shocks and Conditional Debt-Relief Probability; 6. Macroeconomic Outcomes Under Alternative Relief Scenarios
- Notes:
- Description based upon print version of record.
- Includes bibliographical references.
- Description based on online resource; title from PDF title page (ebrary, viewed September 22, 2014).
- ISBN:
- 9786613864116
- 9781462385942
- 146238594X
- 9781462332465
- 1462332463
- 9781283551663
- 1283551667
- 9781462383924
- 1462383920
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