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Debt Sustainability in Emerging Markets: A Critical Appraisal

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  • Yilmaz Akyüz
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    Abstract

    This paper critically assesses the standard IMF analytical framework for debt sustainability in emerging markets. It focuses on complementarities and trade-offs between fiscal and external sustainability, and interactions and feedbacks among policy and endogenous variables affecting debt ratios. It examines current fragilities in emerging markets and notes that domestic debt is of concern. Despite favourable conditions, many governments are unable to generate a large enough primary surplus to stabilize public debt ratios. Worsening global financial conditions may create difficulties for budgetary transfers, posing greater challenges to government debt management since restructuring often is more difficult for domestic than external debt.

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    File URL: http://www.un.org/esa/desa/papers/2007/wp61_2007.pdf
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    Bibliographic Info

    Paper provided by United Nations, Department of Economics and Social Affairs in its series Working Papers with number 61.

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    Length: 26 pages
    Date of creation: Nov 2007
    Date of revision:
    Handle: RePEc:une:wpaper:61

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    Web page: http://www.un.org/esa
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    Keywords: debt sustainability; emerging markets; crisis;

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    1. Dany Jaimovich & Ugo Panizza & Camil F.S. Campos, 2006. "The Unexplained Part of Public Debt," Research Department Publications 4449, Inter-American Development Bank, Research Department.
    2. Hjertholm, Peter, 2001. "Debt Relief and the Rule of Thumb: Analytical History of HIPC Debt Sustainability Targets," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:
    1. Mariolis, Theodore & Papoulis, Κostas, 2010. "Δυναμική Του Χρέους, ‘Δίδυμα Ελλείμματα’ Και Διεθνής Ανταγωνιστικότητα Της Ελληνικής Οικονομίας
      [Debt dynamics,
      ," MPRA Paper 23173, University Library of Munich, Germany.
    2. Mariolis, Theodore & Papoulis, Κostas, 2010. "Δυναμική Του Δημοσίου Χρέους, Οικονομική Πολιτική Και Κοινωνική Συνοχή Στην Ελλάδα: Μία Σημείωση
      [Public debt dynam
      ," MPRA Paper 28551, University Library of Munich, Germany.

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