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A Debt Overhang Model for Low-Income Countries

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  • Junko Koeda

Abstract

This paper presents a theoretical model to explain how debt overhang is generated in low-income countries and discusses its implications for aid design and debt relief. It finds that the extent of debt overhang and the effectiveness of debt relief depend on a recipient country’s initial economic conditions and level of total factor productivity. IMF Staff Papers (2008) 55, 654–678. doi:10.1057/imfsp.2008.13; published online 10 June 2008

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  • Junko Koeda, 2008. "A Debt Overhang Model for Low-Income Countries," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 654-678, December.
    • Handle: RePEc:pal:imfstp:v:55:y:2008:i:4:p:654-678
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    Cited by:

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    2. Johansson, Pernilla, 2008. "Debt Relief, Investment and Growth," Working Papers 2008:11, Lund University, Department of Economics.
    3. Joshua C. Hall, Serkan Karadas and Minh Tam T. Schlosky, 2018. "Is There Moral Hazard in the Heavily Indebted Poor Countries (HIPC) Initiative Debt Relief Process?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(3), pages 1-24, September.
    4. Marin Ferry & Marc Raffinot, 2019. "Curse or Blessing? Has the Impact of Debt Relief Lived up to Expectations? A Review of the Effects of the Multilateral Debt Relief Initiatives for Low-Income Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 55(9), pages 1867-1891, September.
    5. H.R.A. Chamini Thilanka & J.G. Sri Ranjith, 2018. "The Impact of Public Debt on Private Investment: Sri Lankan Experience," International Journal of Business and Social Research, LAR Center Press, vol. 8(8), pages 1-20, August.
    6. Presbitero, Andrea F., 2008. "Debt Relief Effectiveness and Institution Building," MPRA Paper 12597, University Library of Munich, Germany.
    7. Johansson, Pernilla, 2010. "Debt Relief, Investment and Growth," World Development, Elsevier, vol. 38(9), pages 1204-1216, September.
    8. H.R.A. Chamini Thilanka & J.G. Sri Ranjith, 2018. "The Impact of Public Debt on Private Investment: Sri Lankan Experience," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 8(8), pages 1-20, August.
    9. Mr. Ales Bulir & Alma Romero-Barrutieta & Jose Daniel Rodríguez-Delgado, 2011. "The Dynamic Implications of Debt Relief for Low-Income Countries," IMF Working Papers 2011/157, International Monetary Fund.

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