{
  "title": "Donor Herding and Domestic Debt Crisis",
  "publication": "IMF Working Papers, April 1, 2006",
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  "summary": "This paper presents a new model based on the loan-pushing model by Basu (1991) to show how a domestic debt crisis can occur in a low-income country following donor herding. The model focuses on the rational herding behavior of donors due to payoff and information externalities.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- This paper presents a new model based on the loan-pushing model by Basu (1991) to show how a domestic debt crisis can occur in a low-income country following donor herding.\n- The model focuses on the rational herding behavior of donors due to payoff and information externalities.\n- The paper fills a gap in the literature by formally considering the relationship between donor herding and domestic debt crisis in a low-income country.\n- The paper shows that due to donor herding behavior a domestic debt crisis can occur once the actual debt level is above the desirable one."
    },
    {
      "heading": "Model and Mechanism",
      "content": "- Builds on the loan-pushing model by Basu (1991).\n- Emphasizes rational herding behavior of donors driven by:\n  - payoff externalities, and\n  - information externalities."
    },
    {
      "heading": "Key Findings",
      "content": "- Donor herding behavior can precipitate a domestic debt crisis in a low-income country.\n- A domestic debt crisis may occur once the actual debt level is above the desirable debt level (phrase preserved as in the source)."
    },
    {
      "heading": "Subject and Keywords",
      "content": "- Subject: Debt default, Domestic debt, Financial crises, Loans, Real interest rates\n- Keywords: expected return, real interest rate, WP\n\n---\n\n Content in this bundle\n\n- Wp06109\n  - Wp06109 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp06109 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/donor-herding-and-domestic-debt-crisis-19095"
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    "Authors: Ephraim W. Chirwa, Montfort Mlachila, Yohane Anthony Khamfula",
    "Published: April 1, 2006",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451863697.001",
    "This paper presents a new model based on the loan-pushing model by Basu (1991) to show how a domestic debt crisis can occur in a low-income country following donor herding.",
    "The model focuses on the rational herding behavior of donors due to payoff and information externalities.",
    "The paper fills a gap in the literature by formally considering the relationship between donor herding and domestic debt crisis in a low-income country.",
    "The paper shows that due to donor herding behavior a domestic debt crisis can occur once the actual debt level is above the desirable one.",
    "Builds on the loan-pushing model by Basu (1991).",
    "Emphasizes rational herding behavior of donors driven by:",
    "Donor herding behavior can precipitate a domestic debt crisis in a low-income country.",
    "A domestic debt crisis may occur once the actual debt level is above the desirable debt level (phrase preserved as in the source).",
    "Subject: Debt default, Domestic debt, Financial crises, Loans, Real interest rates",
    "Keywords: expected return, real interest rate, WP",
    "**Wp06109**"
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