The Dynamic Implications of Debt Relief for Low-Income Countries [electronic resource]
- Author:
- Bulir, Ales
- Published:
- Washington : International Monetary Fund July 2011
- Physical Description:
- 36 p.
- Additional Creators:
- Romero-Barrutieta, Alma
RodrÃguez-Delgado, Jose Daniel - Access Online:
- serialssolutions.com
- Restrictions on Access:
- License restrictions may limit access.
- Summary:
- Annotation 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.
- Genre(s):
- ISBN:
- 9781455293711
1455293717 (Trade Paper)
View MARC record | catkey: 12540485