A Debt Overhang Model for Low-Income Countries: Implications for Debt Relief

24 Pages Posted: 31 Oct 2006

See all articles by Junko Koeda

Junko Koeda

Ministry of Finance, Japan; Waseda University - School of Political Science and Economics

Date Written: October 2006

Abstract

The paper presents a theoretical model to explain how debt overhang is generated in low-income countries and discusses its implications for debt relief. The paper indicates that the extent of debt overhang, and the effectiveness of debt relief, would depend on a recipient country's initial economic conditions and level of total factor productivity.

Keywords: debt overhang, debt relief, participation constraint, low-income countries, dynamic programming

JEL Classification: E21, F34, F35, F43, O16, O21

Suggested Citation

Koeda, Junko, A Debt Overhang Model for Low-Income Countries: Implications for Debt Relief (October 2006). IMF Working Paper No. 06/224, Available at SSRN: https://ssrn.com/abstract=941286

Junko Koeda (Contact Author)

Ministry of Finance, Japan ( email )

3-1-1 Kasumigaseki
Chiyoda-ku
Tokyo, 100-8940
Japan
1008940 (Fax)

Waseda University - School of Political Science and Economics ( email )

1-6-1 Nishi-Waseda
Shinjuku-ku, Tokyo 169-8050, Tokyo 169-8050
Japan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
132
Abstract Views
828
rank
251,918
PlumX Metrics