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Public debt management and private financial development

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  • Pedersoli, Silvia
  • Presbitero, Andrea F.

Abstract

In several developing countries, high and rising public debt is an important source of vulnerability. Strengthening debt management is a priority, but its effects on domestic economies have been hardly analyzed. This paper asks whether better public debt management could have spillover effects on the private sector, leading to more (and more stable) private capital flows and domestic credit. This is a relevant question in a context of financial deepening and increasing private capital inflows, which could be prone to episodes of bonanza, sudden stops and crises. Our results, based on a sample of developing countries, show positive spillover effects from better public debt management to private capital inflows and domestic financial deepening.

Suggested Citation

  • Pedersoli, Silvia & Presbitero, Andrea F., 2023. "Public debt management and private financial development," Economic Systems, Elsevier, vol. 47(1).
    • Handle: RePEc:eee:ecosys:v:47:y:2023:i:1:s0939362522000723
    DOI: 10.1016/j.ecosys.2022.101010
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    More about this item

    Keywords

    Public debt; Debt management; Private credit; Financial development; Capital flows;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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