A Debt Overhang Model for Low-Income Countries: Implications for Debt Relief

Junko Koeda

No 2006/224, IMF Working Papers from International Monetary Fund

Abstract: The paper presents a theoretical model to explain how debt overhang is generated in low-income countries and discusses its implications for debt relief. The paper indicates that the extent of debt overhang, and the effectiveness of debt relief, would depend on a recipient country's initial economic conditions and level of total factor productivity.

Keywords: WP; debt ceiling; debtor country; interest rate (search for similar items in EconPapers)
Pages: 22
Date: 2006-10-01
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Citations: View citations in EconPapers (5)

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