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Financial Crises Management By The IMF : Was External And Public Debt Sustainable ?

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  • Ben Hassine, Hela

Abstract

The main contribution of this paper is to analyze whether the absence of restructuring programs during some financial crisis episodes was justified. In other words, was the countries' debt sustainable, allowing an intervention through only an IMF bailout ? Using a non- parametric methodology (Classification And Regression Tree or CART), the fiscal and the external solvency of countries facing financial troubles since the 80’s was assessed. It is found that, in some crisis episodes, like the one faced by Argentina in 1995, Brazil in 1999 and Turkey in 2001, a debt restructuring plan was necessary while the countries clearly exhibited solvency problems. This can explain the inefficiency of the IMF intervention during some crises.

Suggested Citation

  • Ben Hassine, Hela, 2015. "Financial Crises Management By The IMF : Was External And Public Debt Sustainable ?," MPRA Paper 75466, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75466
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    References listed on IDEAS

    as
    1. Mr. Jun I Kim, 2008. "Sudden Stops and Optimal Self-Insurance," IMF Working Papers 2008/144, International Monetary Fund.
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    More about this item

    Keywords

    Financial crises; sustainability assessment; IMF; Debt;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • G01 - Financial Economics - - General - - - Financial Crises

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