External Debt Sustainability and Domestic Debt in Heavily Indebted Poor Countries

M. Arnone and Andrea Presbitero
Authors registered in the RePEc Author Service: Marco Arnone and Massimo Arnone Arnone

Rivista Internazionale di Scienze Sociali, 2007, vol. 115, issue 2, 187-213

Abstract: In this paper we broaden the standard debt sustainability framework used in the IMF-WB Heavily Indebted Poor Countries (HIPC) Initiative to include the analysis of domestic public debt and other feedback effects into the usual debt sustainability analysis (DSA). The latter does not take into account the fully-fledged government budget constraint and the feedback effects of the fiscal and monetary adjustment required by multilateral programs. This work focuses on the evaluation of total public debt sustainability in a simple accounting framework that includes exchange rate effects. We use new data on domestic public debt and show how the switch from foreign to domestic borrowing, and rising domestic real interest rates are likely to undermine the overall sustainability and the success of debt relief programs.

Keywords: Debt Sustainability; Domestic Debt; HIPC (search for similar items in EconPapers)
JEL-codes: F34 H63 O19 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://riss.vitaepensiero.it/scheda-articolo_digit ... 002_0029-150875.html (text/html)
Yes

Related works:
Working Paper: External debt sustainability and domestic debt in Heavily Indebted Poor Countries (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vep:journl:y:2007:v:115:i:2:p:187-213

Access Statistics for this article

Rivista Internazionale di Scienze Sociali is currently edited by Maurizio Baussola

More articles in Rivista Internazionale di Scienze Sociali from Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore
Bibliographic data for series maintained by Vep - Vita e Pensiero ().