Lost and Found: Market Access and Public Debt Dynamics

IMF Working Papers, December 23, 2016

Source details

Canonical URL

Lost and Found: Market Access and Public Debt Dynamics

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Carlo Cottarelli, Andrea F Presbitero, Antonio Bassanetti
• Published: December 23, 2016
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781475563207.001

Overview and main argument

• Authors: Carlo Cottarelli, Andrea F Presbitero, Antonio Bassanetti
• Publication: IMF Working Papers, Working Paper No. 2016/253, Issue 253
• Date: December 23, 2016
• Pages: 34
• DOI: https://doi.org/10.5089/9781475563207.001
• ISBN: 9781475563207
• ISSN: 1018-5941

• The empirical literature identifies the level of public debt (measured as a share of GDP) as a key predictor of debt defaults and sovereign market access.
• The paper argues that the debt-to-GDP level, while theoretically and empirically justified, should not be the only fiscal metric used to assess the relationship between public debt and debt defaults/market access.
• In a large panel of emerging markets, the dynamics of the debt ratio is shown to play a critical role for market access.

Key empirical findings

• Given a certain level of debt, a steadily declining debt ratio is associated with:
  • a lower probability of debt distress/market loss, and
  • a higher likelihood of market re-access once access had been lost.
• The paper emphasizes the importance of debt dynamics (the trajectory and change over time of the debt-to-GDP ratio) in addition to debt levels when assessing sovereign debt sustainability and market access.

Subjects and keywords

• Subject areas: Debt default, Debt sustainability, Debt sustainability analysis, External debt, Fiscal policy, Fiscal stance, Public debt
• Keywords: Debt default, debt distress, debt dynamics, debt ratio, Debt Sustainability, Debt sustainability analysis, Default, distress episode, Fiscal Crises, Fiscal stance, Global, International Capital Markets, market, market access, market loss, WP

Publication and access metadata

• Series: Working Paper No. 2016/253
• Volume: 2016
• Stock No: WPIEA2016253

Source: IMF Working Paper "Lost and Found: Market Access and Public Debt Dynamics", Carlo Cottarelli, Andrea F Presbitero, and Antonio Bassanetti, December 23, 2016.

Content in this bundle

• Lost and Found: Market Access and Public Debt Dynamics
  • Lost and Found: Market Access and Public Debt Dynamics (Markdown version)
  • Lost and Found: Market Access and Public Debt Dynamics (PDF)