This paper assesses an economy's default risk on its international debt by considering different approaches,prevalent in the literature. Unlike in multi-country studies,these data comprise reported loans to one economy only-This is useful since the country's macroeconomic development is the common factor in all observations.The study suggests that for Israeli data the traditional approach,stressing an economy's ability to repay the external debt,performed better than the more recent approach emphasizing the borrowing country's costs and benefits from default,reflecting Its willingness to repay debt.Policy considerations conclude the study.
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
3147.
Length: Date of creation: 04 Dec 1987 Date of revision: Publication status: Published in Journal of Economic Development Number 1.Volume 14(1989): pp. 65-91 Handle: RePEc:pra:mprapa:3147
Find related papers by JEL classification: G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
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