A Debt Overhang Model for Low-Income Countries: Implications for Debt Relief
October 1, 2006
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Summary
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.
Subject: Consumption, Debt burden, Debt relief, Loans, Total factor productivity
Keywords: debt ceiling, debtor country, interest rate, WP
Pages:
22
Volume:
2006
DOI:
Issue:
224
Series:
Working Paper No. 2006/224
Stock No:
WPIEA2006224
ISBN:
9781451864847
ISSN:
1018-5941
