Growth implosions, debt explosions, and my Aunt Marilyn : do growth slowdowns cause public debt crises?
AbstractThe worldwide slowdown in growth after 1975 was a major negative fiscal shock. Slower growth lowers the present value of tax revenues and primary surpluses and thus makes a given level of debt more burdensome. Most countries failed to adjust to the negative fiscal consequences of the growth implosion, so public-debt-to-GDP ratios exploded. The growth slowdown therefore played an important role in the debt crisis of the middle-income countries in the 1980s, the crisis of the heavily indebted poor countries (HIPCs) in the 1980s and 1990s, and the increased public debt burden of the industrial countries in the 1980s and 1990s. Moreover, the HIPCs'debt problems were worse than elsewhere because, as a result of poor policies, these countries grew more slowly after 1975 than other low-income countries. Econometric tests and fiscal solvency accounting confirm the important role of growth in debt crises.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2531.
Date of creation: 31 Jan 2001
Date of revision:
Economic Theory&Research; Strategic Debt Management; Environmental Economics&Policies; Economic Conditions and Volatility; Macroeconomic Management;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fischer, Stanley & Easterly, William, 1990. "The Economic of the Government Budget Constraint," World Bank Research Observer, World Bank Group, vol. 5(2), pages 127-42, July.
- Bruno, Michael & Easterly, William, 1995.
"Inflation crises and long-run growth,"
Policy Research Working Paper Series
1517, The World Bank.
- Pritchett, Lant, 2000. "Understanding Patterns of Economic Growth: Searching for Hills among Plateaus, Mountains, and Plains," World Bank Economic Review, World Bank Group, vol. 14(2), pages 221-50, May.
- Ben-David, D. & Papell, D.H., 1996.
"Slowdowns and Meltdowns: Post-War Growth Evidence from 74 Countries,"
9-96, Tel Aviv.
- Dan Ben-David & David H. Papell, 1998. "Slowdowns And Meltdowns: Postwar Growth Evidence From 74 Countries," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 561-571, November.
- Dan Ben-David & David H. Papell, 1997. "Slowdowns and Meltdowns: Postwar Growth Evidence from 74 Countries," NBER Working Papers 6266, National Bureau of Economic Research, Inc.
- Ben-David, Dan & Papell, David, 1995. "Slowdowns and Meltdowns: Post-war Growth Evidence from 74 Countries," CEPR Discussion Papers 1111, C.E.P.R. Discussion Papers.
- Pritchett, Lant, 2000.
"The tyranny of concepts - CUDIE (Cumulated, Depreciated Investment Effort) is NOT capital,"
Policy Research Working Paper Series
2341, The World Bank.
- Pritchett, Lant, 2000. " The Tyranny of Concepts: CUDIE (Cumulated, Depreciated, Investment Effort) Is Not Capital," Journal of Economic Growth, Springer, vol. 5(4), pages 361-84, December.
- Auerbach, Alan J. & Gale, William G., 2000.
"Perspectives on the Budget Surplus,"
National Tax Journal,
National Tax Association, vol. 53(n. 3), pages 459-72, September.
- Kling, Jeff & Pritchett, Lant, 1994. "Where in the world is population growth bad?," Policy Research Working Paper Series 1391, The World Bank.
- Imbs, Jean & Rancière, Romain, 2005.
"The Overhang Hangover,"
CEPR Discussion Papers
5210, C.E.P.R. Discussion Papers.
- Jean Imbs & Romain Ranciere, 2005. "The Overhang Hangover," Working Papers 219, Barcelona Graduate School of Economics.
- Imbs, Jean & Ranciere, Romain, 2005. "The overhang hangover," Policy Research Working Paper Series 3673, The World Bank.
- Jean Imbs & Romain Rancière, 2005. "The Overhang Hangover," Swiss Finance Institute Research Paper Series 06-03, Swiss Finance Institute.
- Jean Imbs & Romain Rancière, 2005. "The overhang hangover," Economics Working Papers 878, Department of Economics and Business, Universitat Pompeu Fabra.
- Imbs, Jean & Ranciere, Romain, 2006. "The Overhang Hangover," CEPREMAP Working Papers (Docweb) 0604, CEPREMAP.
- Jean-Claude Berthélemy, 2004. "Bilateralism and multilateralism in official development assistance policies," Cahiers de la Maison des Sciences Economiques bla04104, Université Panthéon-Sorbonne (Paris 1).
- Calderon, Cesar & Loayza, Norman & Schmidt-Hebbel, Klaus, 2005. "Does openness imply greater exposure ?," Policy Research Working Paper Series 3733, The World Bank.
- P.Kalonga Stambuli, 2003. "Paris Club Debt Relief, Traditional Frameworks and Implications for Poor Country Debt," International Finance 0301003, EconWPA.
- repec:idb:brikps:48218 is not listed on IDEAS
- Ianchovichina, Elena & Kacker, Pooja, 2005. "Growth trends in the developing world : country forecasts and determinants," Policy Research Working Paper Series 3775, The World Bank.
- repec:idb:brikps:48058 is not listed on IDEAS
- Laura Jaramillo & Cemile Sancak, 2007. "Growth in the Dominican Republic and Haiti: Why has the Grass Been Greener on One Side of Hispaniola," IMF Working Papers 07/63, International Monetary Fund.
- Jean-Claude Berthélemy, 2005. "Bilateral donors' interest vs. Recipients' development motives in aid allocation : do all donors behave the same ?," Cahiers de la Maison des Sciences Economiques bla05001, Université Panthéon-Sorbonne (Paris 1).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.