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Does Structural Economic Vulnerability Matter for Public Indebtedness in Developing Countries?

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  • Sena Kimm GNANGNON

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Abstract

In this study, we examine the effect of structural economic vulnerability of developing countries on their public indebtedness. We perform our econometric analysis by relying on 96 developing countries over the period 1980-2008. The results suggest evidence of a “U-shaped” relationship between the structural vulnerability and the total public debt in developing countries. In Low-Income Countries (LICs), the build-up of the total public debt is particularly explained by structural vulnerability. Accordingly, international institutions should take into account such structural vulnerability when designing development policies, especially the ones related to debt sustainability in developing countries and particularly LICs.

Suggested Citation

  • Sena Kimm GNANGNON, 2012. "Does Structural Economic Vulnerability Matter for Public Indebtedness in Developing Countries?," Working Papers 201236, CERDI.
  • Handle: RePEc:cdi:wpaper:1399
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    File URL: http://publi.cerdi.org/ed/2012/2012.36.pdf
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    References listed on IDEAS

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    1. Rocher, E., 2007. "Les risques de ré-endettement des pays en développement après les annulations de dettes," Bulletin de la Banque de France, Banque de France, issue 157, pages 35-44.
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    More about this item

    Keywords

    Structural Vulnerability; Public debt; Fixed Effects;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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