Financial crises management by the International Monetary Fund: Was external and public debt sustainable ?

Hela Ben hassine khalladi ()
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Hela Ben hassine khalladi: University of El Manar, Faculty of Economics and Management of Tunis

Economics Bulletin, 2017, vol. 37, issue 1, 118-136

Abstract: The main contribution of this paper is to analyze whether the absence of restructuring programs during some financial crisis episodes was justified. In other words, was the countries' debt sustainable, allowing an intervention through only an IMF bailout ? Using a non- parametric methodology (Classification And Regression Tree or CART), the fiscal and the external solvency of countries facing financial troubles since the 80's was assessed. It is found that, in some crisis episodes, like the one faced by Argentina in 1995, Brazil in 1999 and Turkey in 2001, a debt restructuring plan was necessary while the countries clearly exhibited solvency problems. This can explain the inefficiency of the IMF intervention during some crises.

Keywords: Financial crises; external and public debt sustainability assessment; IMF (search for similar items in EconPapers)
JEL-codes: F3 (search for similar items in EconPapers)
Date: 2017-01-17
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