When Is External Debt Sustainable?

This paper examines the determinants of "debt distress," which they define as periods in which countries resort to exceptional finance in any of three forms: (1) significant arrears on external debt, (2) Paris Club rescheduling, and (3) n...

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Main Authors:	Kraay, Aart, Nehru, Vikram
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	EXTERNAL DEBT DEBT DISTRESSED COUNTRIES DEBT STRATEGY BORROWING POLICIES PARIS CLUB LENDING HEAVILY INDEBTED POOR COUNTRIES INTERNATIONAL MONETARY FUND BALANCE OF PAYMENTS BENCHMARK BORROWING CREDITOR CREDITORS CURRENCY UNITS DEBT DEBT BURDEN DEBT CRISES DEBT OUTSTANDING DEBT PROBLEMS DEBT REDUCTION DEBT RELIEF DEBT RESCHEDULING DEBT SECURITIES DEBT SERVICE DEBT SERVICE PAYMENTS DEBT SERVICING DEBT STOCKS DEBT SUSTAINABILITY DEBTOR DEBTOR COUNTRIES DEBTOR REPORTING DEBTS DEFLATORS DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXPORTS FACE VALUE FINANCIAL CRISIS FISCAL YEAR GROWTH RATE IMPORTANCE OF LIQUIDITY IMPORTS INCOME INCOME EFFECT INCOME INEQUALITY INFLATION INFLATION RATE INTEREST RATES INTERNATIONAL RESERVES LIQUIDITY LONG TERM DEBT MACROECONOMIC STABILITY PAYMENTS IMBALANCES PER CAPITA INCOME PRESENT VALUE PRESENT VALUE OF DEBT PROBABILITY OF DEFAULT PROPERTY RIGHTS PUBLIC SERVICES REAL GDP REGRESSION ANALYSIS REPAYMENT SECONDARY MARKETS SOLVENCY SOVEREIGN DEBT SOVEREIGN RISK SOVEREIGN RISK RATINGS TERMS OF TRADE TRADEOFFS
Online Access:	http://documents.worldbank.org/curated/en/2004/02/3911464/external-debt-sustainable http://hdl.handle.net/10986/14314

id	okr-10986-14314
recordtype	oai_dc
spelling	okr-10986-143142021-04-23T14:03:20Z When Is External Debt Sustainable? Kraay, Aart Nehru, Vikram EXTERNAL DEBT DEBT DISTRESSED COUNTRIES DEBT STRATEGY BORROWING POLICIES PARIS CLUB LENDING HEAVILY INDEBTED POOR COUNTRIES INTERNATIONAL MONETARY FUND BALANCE OF PAYMENTS BENCHMARK BORROWING CREDITOR CREDITORS CURRENCY UNITS DEBT DEBT BURDEN DEBT CRISES DEBT OUTSTANDING DEBT PROBLEMS DEBT REDUCTION DEBT RELIEF DEBT RESCHEDULING DEBT SECURITIES DEBT SERVICE DEBT SERVICE PAYMENTS DEBT SERVICING DEBT STOCKS DEBT SUSTAINABILITY DEBTOR DEBTOR COUNTRIES DEBTOR REPORTING DEBTS DEFLATORS DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXPORTS EXTERNAL DEBT FACE VALUE FINANCIAL CRISIS FISCAL YEAR GROWTH RATE IMPORTANCE OF LIQUIDITY IMPORTS INCOME INCOME EFFECT INCOME INEQUALITY INFLATION INFLATION RATE INTEREST RATES INTERNATIONAL RESERVES LIQUIDITY LONG TERM DEBT MACROECONOMIC STABILITY PAYMENTS IMBALANCES PER CAPITA INCOME PRESENT VALUE PRESENT VALUE OF DEBT PROBABILITY OF DEFAULT PROPERTY RIGHTS PUBLIC SERVICES REAL GDP REGRESSION ANALYSIS REPAYMENT SECONDARY MARKETS SOLVENCY SOVEREIGN DEBT SOVEREIGN RISK SOVEREIGN RISK RATINGS TERMS OF TRADE TRADEOFFS This paper examines the determinants of "debt distress," which they define as periods in which countries resort to exceptional finance in any of three forms: (1) significant arrears on external debt, (2) Paris Club rescheduling, and (3) nonconcessional International Monetary Fund lending. Using probit regressions, the authors find that three factors explain a substantial fraction of the cross-country and time-series variation in the incidence of debt distress: the debt burden, the quality of policies and institutions, and shocks. They show that these results are robust to a variety of alternative specifications, and that their core specifications have substantial out-of-sample predictive power. The authors also explore the quantitative implications of these results for the lending strategies of official creditors. 2013-07-01T18:30:34Z 2013-07-01T18:30:34Z 2004-02 http://documents.worldbank.org/curated/en/2004/02/3911464/external-debt-sustainable http://hdl.handle.net/10986/14314 English en_US Policy Research Working Paper;No.3200 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	EXTERNAL DEBT DEBT DISTRESSED COUNTRIES DEBT STRATEGY BORROWING POLICIES PARIS CLUB LENDING HEAVILY INDEBTED POOR COUNTRIES INTERNATIONAL MONETARY FUND BALANCE OF PAYMENTS BENCHMARK BORROWING CREDITOR CREDITORS CURRENCY UNITS DEBT DEBT BURDEN DEBT CRISES DEBT OUTSTANDING DEBT PROBLEMS DEBT REDUCTION DEBT RELIEF DEBT RESCHEDULING DEBT SECURITIES DEBT SERVICE DEBT SERVICE PAYMENTS DEBT SERVICING DEBT STOCKS DEBT SUSTAINABILITY DEBTOR DEBTOR COUNTRIES DEBTOR REPORTING DEBTS DEFLATORS DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXPORTS EXTERNAL DEBT FACE VALUE FINANCIAL CRISIS FISCAL YEAR GROWTH RATE IMPORTANCE OF LIQUIDITY IMPORTS INCOME INCOME EFFECT INCOME INEQUALITY INFLATION INFLATION RATE INTEREST RATES INTERNATIONAL RESERVES LIQUIDITY LONG TERM DEBT MACROECONOMIC STABILITY PAYMENTS IMBALANCES PER CAPITA INCOME PRESENT VALUE PRESENT VALUE OF DEBT PROBABILITY OF DEFAULT PROPERTY RIGHTS PUBLIC SERVICES REAL GDP REGRESSION ANALYSIS REPAYMENT SECONDARY MARKETS SOLVENCY SOVEREIGN DEBT SOVEREIGN RISK SOVEREIGN RISK RATINGS TERMS OF TRADE TRADEOFFS
spellingShingle	EXTERNAL DEBT DEBT DISTRESSED COUNTRIES DEBT STRATEGY BORROWING POLICIES PARIS CLUB LENDING HEAVILY INDEBTED POOR COUNTRIES INTERNATIONAL MONETARY FUND BALANCE OF PAYMENTS BENCHMARK BORROWING CREDITOR CREDITORS CURRENCY UNITS DEBT DEBT BURDEN DEBT CRISES DEBT OUTSTANDING DEBT PROBLEMS DEBT REDUCTION DEBT RELIEF DEBT RESCHEDULING DEBT SECURITIES DEBT SERVICE DEBT SERVICE PAYMENTS DEBT SERVICING DEBT STOCKS DEBT SUSTAINABILITY DEBTOR DEBTOR COUNTRIES DEBTOR REPORTING DEBTS DEFLATORS DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXPORTS EXTERNAL DEBT FACE VALUE FINANCIAL CRISIS FISCAL YEAR GROWTH RATE IMPORTANCE OF LIQUIDITY IMPORTS INCOME INCOME EFFECT INCOME INEQUALITY INFLATION INFLATION RATE INTEREST RATES INTERNATIONAL RESERVES LIQUIDITY LONG TERM DEBT MACROECONOMIC STABILITY PAYMENTS IMBALANCES PER CAPITA INCOME PRESENT VALUE PRESENT VALUE OF DEBT PROBABILITY OF DEFAULT PROPERTY RIGHTS PUBLIC SERVICES REAL GDP REGRESSION ANALYSIS REPAYMENT SECONDARY MARKETS SOLVENCY SOVEREIGN DEBT SOVEREIGN RISK SOVEREIGN RISK RATINGS TERMS OF TRADE TRADEOFFS Kraay, Aart Nehru, Vikram When Is External Debt Sustainable?
relation	Policy Research Working Paper;No.3200
description	This paper examines the determinants of "debt distress," which they define as periods in which countries resort to exceptional finance in any of three forms: (1) significant arrears on external debt, (2) Paris Club rescheduling, and (3) nonconcessional International Monetary Fund lending. Using probit regressions, the authors find that three factors explain a substantial fraction of the cross-country and time-series variation in the incidence of debt distress: the debt burden, the quality of policies and institutions, and shocks. They show that these results are robust to a variety of alternative specifications, and that their core specifications have substantial out-of-sample predictive power. The authors also explore the quantitative implications of these results for the lending strategies of official creditors.
format	Publications & Research :: Policy Research Working Paper
author	Kraay, Aart Nehru, Vikram
author_facet	Kraay, Aart Nehru, Vikram
author_sort	Kraay, Aart
title	When Is External Debt Sustainable?
title_short	When Is External Debt Sustainable?
title_full	When Is External Debt Sustainable?
title_fullStr	When Is External Debt Sustainable?
title_full_unstemmed	When Is External Debt Sustainable?
title_sort	when is external debt sustainable?
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2004/02/3911464/external-debt-sustainable http://hdl.handle.net/10986/14314
_version_	1764430290553405440

When Is External Debt Sustainable?

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