Financial Crises Management By The IMF: Was External And Public Debt Sustainable ?

Hela Ben Hassine

MPRA Paper from University Library of Munich, Germany

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; sustainability assessment; IMF; Debt (search for similar items in EconPapers)
JEL-codes: F32 F34 F35 G01 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-fdg and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75466

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