A Debt Overhang Model for Low-Income Countries: Implications for Debt Relief
24 Pages Posted: 31 Oct 2006
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: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Carmen Reinhart, Kenneth Rogoff, ...
-
International Institutions for Reducing Global Financial Instability
-
By Jonathan Eaton and Raquel Fernández
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
Can Output Losses Following International Financial Crises Be Avoided?
-
Defaultable Debt, Interest Rates and the Current Account
By Mark Aguiar and Gita Gopinath
-
Defaultable Debt, Interest Rates, and the Current Account
By Mark Aguiar and Gita Gopinath
-
Have Commercial Banks Ignored History?
By Sule Ozler