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Debt Overhang Debt Reduction And Investment
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Book Synopsis Debt Overhang, Debt Reduction and Investment by : International Monetary Fund
Download or read book Debt Overhang, Debt Reduction and Investment written by International Monetary Fund and published by International Monetary Fund. This book was released on 1990-09-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: While there is a substantial body of literature on the effects of “debt overhang” on investment in heavily-indebted countries, there is surprisingly little empirical work available on this subject. This paper tests the hypothesis that the stock of foreign debt acts as a disincentive to private investment in the specific case of the Philippines. The empirical estimates provide support for this hypothesis, particularly after 1982. The estimates indicate that a $1.3 billion debt reduction (such as the one completed through the buyback operation in early 1990) would increase investment demand by something between one half and two percentage points of GNP.
Book Synopsis Debt Overhang Debt Reduction and Investment: the Case of the Phillipines by : E. Borensztein
Download or read book Debt Overhang Debt Reduction and Investment: the Case of the Phillipines written by E. Borensztein and published by . This book was released on 1990 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Debt Overhang, Debt Reduction and Investment by : Eduardo Borensztein
Download or read book Debt Overhang, Debt Reduction and Investment written by Eduardo Borensztein and published by . This book was released on 2006 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: While there is a substantial body of literature on the effects of quot;debt overhangquot; on investment in heavily-indebted countries, there is surprisingly little empirical work available on this subject. This paper tests the hypothesis that the stock of foreign debt acts as a disincentive to private investment in the specific case of the Philippines. The empirical estimates provide support for this hypothesis, particularly after 1982. The estimates indicate that a $1.3 billion debt reduction (such as the one completed through the buyback operation in early 1990) would increase investment demand by something between one half and two percentage points of GNP.
Book Synopsis Can Debt-reduction Policies Restore Investment and Economic Growth in Highly Indebted Countries? by : Jacques Morisset
Download or read book Can Debt-reduction Policies Restore Investment and Economic Growth in Highly Indebted Countries? written by Jacques Morisset and published by World Bank Publications. This book was released on 1991 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 1982, public and private investment rates have declined dramatically in most debtor countries. What would be the effects of debt- reduction operations for heavily indebted countries like Argentina?
Book Synopsis Estimating the Efficiency Gains of Debt Restructuring by : Jeremy Bulow
Download or read book Estimating the Efficiency Gains of Debt Restructuring written by Jeremy Bulow and published by World Bank Publications. This book was released on 1994 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The debt- overhang disincentive may not be as important as the broader problem of debtors' credit constraints in international capital markets. For severely indebted low- income countries, the best strategy is probably to replace nonconcessional debt with new concessional loans.
Book Synopsis Debt Overhang, Credit Rationing and Investment by : Eduardo Borensztein
Download or read book Debt Overhang, Credit Rationing and Investment written by Eduardo Borensztein and published by . This book was released on 2006 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper evaluates the effect of foreign debt on investment in a heavily-indebted country, using numerical simulations of a simple rational expectations growth model. Two particular effects are distinguished. First, the effect due to quot;debt overhangquot; of pas t accumulated debts; and second, the effect of quot;credit rationingquot; or inability to obtain new financing. The results from the simulations indicate the credit rationing may be a powerful disincentive to investment. This suggests that in order to maximize the impact on productive investment, debt reduction plans need to be accompanied by additional foreign lending.
Book Synopsis Voluntary Debt Reduction by : International Monetary Fund
Download or read book Voluntary Debt Reduction written by International Monetary Fund and published by International Monetary Fund. This book was released on 1988-09-06 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an economy with a debt overhang, investment depends on expected tax rates. On the other hand, expected tax rates depend on the debt’s face value. Therefore investment depends on the face value of debt. I show that this may lead to a positive or negative association between debt and investment depending on the degree of international capital mobility and attitudes toward risk. There may also exist multiple equilibria; with high and low investment levels. The paper explores the desirability of debt reduction in this environment. First, it characterizes circumstances in which debt reduction is desirable from the collective point of view of the creditors. Second, it formulates the forgiveness decision as a noncooperative game among creditors and explores the scope for debt reduction as an outcome of this game.
Book Synopsis Debt Reduction and Development by : Sudarshn Gooptu
Download or read book Debt Reduction and Development written by Sudarshn Gooptu and published by Praeger. This book was released on 1993-01-26 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study provides an in-depth analysis of the external debt problem of a country--Mexico--that allegedly faces a debt overhang, which inhibits long-term growth-oriented investment. Issues facing the debtor nation and its commercial bank creditors are simultaneously examined in order to move closer towards an understanding of the situation of debt-distressed developing countries. The need to address these issues on a case-by-case basis is emphasized, opposed to a global approach to solving the debt crisis presently recommended by some. Not only does this work provide a survey of the theoretical literature on the international debt crisis it also provides a way of incorporating simultaneously the concerns of the opposing sides--debtor nations and creditor banks. It will be of interest to economists and policy-makers in international finance and trade and development economics.
Book Synopsis Strategic Investment in a Debt Bargaining Framework by : International Monetary Fund
Download or read book Strategic Investment in a Debt Bargaining Framework written by International Monetary Fund and published by International Monetary Fund. This book was released on 1989-07-12 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the strategic role of investment from a debtor country’s perspective. The framework is one in which, if the debtor country is unable to meet debt obligations, a bargaining regime determines the amount of debt repayment. In the context of a two-country real trade model, debt repayment is equal to the trade surplus of the debtor. The outcome of the bargaining game will therefore be dependent (among other things) on the level of production in the debtor country. In this framework, the paper shows that productive investment may increase or decrease the bargaining power of the debtor country. This ambiguity appears to be fairly robust.
Book Synopsis Voluntary Debt Reduction by : Elhanan Helpman
Download or read book Voluntary Debt Reduction written by Elhanan Helpman and published by . This book was released on 1988 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an economy with a debt overhang, investment depends on expected tax rates. On the other hand, expected tax rates depend on the debt's face value. Therefore investment depends on the face value of debt. I show that this may lead to a positive or negative association between debt and investment depending on the degree of international capital mobility and attitudes toward risk. There may also exist multiple equilibria; with high and low investment levels. The paper explores the desirability of debt reduction in this environment. First, it characterizes circumstances in which debt reduction is desirable from the collective point of view of the creditors. Second, it formulates the forgiveness decision as a noncooperative game among creditors and explores the scope for debt reduction as an outcome of this game.
Book Synopsis An Econometric Study of Debt Overhang, Debt Reduction, Investment and Economic Growth in Nigeria by : Milton A. Iyoha
Download or read book An Econometric Study of Debt Overhang, Debt Reduction, Investment and Economic Growth in Nigeria written by Milton A. Iyoha and published by . This book was released on 1997 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Sovereign Debt Relief Schemes and Welfare by : Mr.Aasim M. Husain
Download or read book Sovereign Debt Relief Schemes and Welfare written by Mr.Aasim M. Husain and published by International Monetary Fund. This book was released on 1992-03-01 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that concerted debt reduction may be welfare-improving even when the investment disincentive effect of a debt overhang is not large enough to place the debtor country on the wrong side of the debt Laffer curve. Whether the appropriate relief scheme involves debt reduction or new money, however, depends on whether investment disincentives or liquidity constraints dominate. It is shown that, except under very special circumstances, mixed policy packages involving both debt and liquidity relief may not yield the desired results.
Book Synopsis Conditionality and Debt Relief by : Stijn Claessens
Download or read book Conditionality and Debt Relief written by Stijn Claessens and published by World Bank Publications. This book was released on 1989 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Sovereign Debt Repurchases by : Jeremy Bulow
Download or read book Sovereign Debt Repurchases written by Jeremy Bulow and published by . This book was released on 1989 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show, in a reasonably general model, that if a highly indebted country has good investment projects available to it, then it will not benefit from using any of its resources to buy back debt at market prices. Debt buybacks and debt-equity swaps only make sense for the country if these programs are heavily subsidized by creditors. This result holds for all buyback programs large and small, so long as they involve voluntary creditor participation and are not part of a larger deal including offsetting concessions from lenders. Our analysis therefore casts doubt on the popular argument that unilateral debt repurchases benefit HICs by relieving "debt overhang."
Book Synopsis Dealing with the Debt Crisis by : Ishrat Husain
Download or read book Dealing with the Debt Crisis written by Ishrat Husain and published by World Bank Publications. This book was released on 1989 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt: The debt crisis in perspective; Debt management in the late 1980s; Debt reduction and recontracting.
Book Synopsis costs and benefits of debt and debt service reduction by : Eduardo Fernández-Arias
Download or read book costs and benefits of debt and debt service reduction written by Eduardo Fernández-Arias and published by World Bank Publications. This book was released on 1993 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The overhang hangover by : Jean Imbs
Download or read book The overhang hangover written by Jean Imbs and published by World Bank Publications. This book was released on 2005 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The authors revisit the debt overhang question. They first use nonparametric techniques to isolate a panel of countries on the downward sloping section of a debt Laffer Curve. In particular, overhang countries are ones where a threshold level of debt is reached in sample, beyond which (initial) debt ends up lowering (subsequent) growth. On average, significantly negative coefficients appear when debt face value reaches 60 percent of GDP or 200 percent of exports, and when its present value reaches 40 percent of GDP or 140 percent of exports. Second, the authors depart from reduced form growth regressions and perform direct tests of the theory on the thus selected sample of overhang countries. In the spirit of event studies, they ask whether, as the overhang level of debt is reached: (1) investment falls precipitously as it should when it becomes optimal to default; (2) economic policy deteriorates observably, as it should when debt contracts become unable to elicit effort on the part of the debtor; and (3) the terms of borrowing worsen noticeably, as they should when it becomes optimal for creditors to preempt default and exact punitive interest rates. The authors find a systematic response of investment, particularly when property rights are weakly enforced, some worsening of the policy environment, and a fall in interest rates. This easing of borrowing conditions happens because lending by the private sector virtually disappears in overhang situations, and multilateral agencies step in with concessional rates. Thus, while debt relief is likely to improve economic policy (and especially investment) in overhang countries, it is doubtful that it would ease their terms of borrowing or the burden of debt. "--World Bank web site.
