Endogenous Creditor Seniority and External Debt Values
AbstractA new aggregation scheme used to measure the sources of fiscal financing of indebted countries suggests that the seniority of domestic debt improved at the expense of foreign bank debt during the late 1980s. This paper argues that this was the revenue-maximizing response of governments to capital flight that drained the domestic financial "tax base" subject to indirect taxation. Empirical analysis indicates that the profile of the sources of fiscal financing influenced external debt values. Econometric analysis implies that previous studies have neglected an important reason for the decline in loan values from 1985 to 1989: higher international interest rates.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 40 (1993)
Issue (Month): 2 (June)
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Michael Dooley & Mark R. Stone, 1992. "Endogenous Creditor Seniority and External Debt Values," NBER Working Papers 4172, National Bureau of Economic Research, Inc.
- Michael P. Dooley & Mark R. Stone, 1992. "Endogenous Creditor Seniority and External Debt Values," IMF Working Papers 92/57, International Monetary Fund.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
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