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Evidence suggests that sovereign debt markets are not featured by perfect competition but power dynamics are a key determinant of market outcomes such as ex-post returns on sovereign bonds. In such environment, coordination within each side of the market matters. With the purpose of influencing the international debt architecture, private creditors have historically been fairly coordinated and their interests more aligned ex-ante. Sovereign debtors, however, have not. The power asymmetry that that entails has equity and efficiency implications, both ex-ante and ex-post. This paper analyzes asymmetries in collective action of each side of the sovereign debt market and the mechanisms through which it affects market outcomes. It also analyses the Cartagena Group's experience in the 1980s as a prominent historical case of greater borrower coordination and identifies mechanisms through which greater debtor coordination could be fostered. [ABSTRACT FROM AUTHOR]

This paper presents a stock-flow-consistent model in which growth is led by exports, government consumption, and consumption out of interest. It considers domestic and external debt dynamics and gross capital flows. The balance of payments constraint serves as a ceiling but not a floor for growth. Countries may choose to not fully use their external space to decrease public debts or accumulate international reserves. The model is applied to a comparative dynamics exercise to explore how a hike in foreign interest rates may impact growth and income distribution in a developing country under different policy responses. The shock forces the country to apply at least one contractionary macroeconomic policy or lose its reserves. Contractionary monetary policy may be the only tool to avoid external disequilibrium after the shock for countries with open capital accounts. Financial flows may impose trade-offs between short and long run policy objectives. Accumulated international reserves helps maintain expansionary policies and higher average growth rates after external shocks by providing liquidity in foreign currency. [ABSTRACT FROM AUTHOR]

Gross Domestic Product (GDP) growth and national debt are like two faces of the same coin. The national debt is the major source of growth of GDP. GDP is completely paralyzed in the absence of national debt. The national debt in turn is hugely dependent on foreign funding. The GDP is growing faster as a result of these investments. It is believed that the external debt will never be entirely settled. It takes some time for the agreement to mature before external investments become available in response to demand. The primary topic of this study is the delay in foreign investment’s real arrival and how it affects the dynamics of GDP and national debt. We investigate this impact with a delay parameter τ. The stability analysis is done on the system and the nonzero equilibrium is computed. For a crucial delay parameter value, Hopf bifurcation is seen. The research plays a significant role in economic growth. [ABSTRACT FROM AUTHOR]

AbstractWhile several studies examine the effects of IMF conditionalities and IMF programs in relation to climate change, to our knowledge, there are no studies that empirically examine the effect of IMF conditionalities on recipient states’ readiness to address climate change. Using a two-stage least square instrumental variable approach, we found that IMF conditionalities related to the fiscal balance policy area and, to a lesser extent, the external debt policy area weaken the recipient states’ climate change readiness. These findings are supported by a series of robustness checks. Nonetheless, this reflects that IMF conditionalities that fiscally restrain states can weaken their fiscal capacity to invest in climate change adaptation. Therefore, our research findings carry policy implications for the IMF, and future research is needed to examine the IMF in relation to its climate change initiatives. The limitations of this study are also discussed. [ABSTRACT FROM AUTHOR]

The objective of this study was to identify the determinants of sovereign debt default for a panel of twenty developing nations over the period 1970 to 2019, specifically focusing on the influence of defence/military spending. This study's findings indicate that increased military spending has generally reduced default risk in the examined countries, but that excessive military spending, past a certain threshold, can have strong detrimental impacts on the probability of sovereign debt default. Additionally, the findings show that the country's levels of democracy and foreign currency reserves level are both negatively linked to debt default risk, whereas default history, level of external debt, and short-term debt to reserves ratio are all significantly positively linked to higher default risk. The study suggests that certain countries may wish to evaluate their level of military spending to ensure it is not too high. Alternatively, countries may lower their accrual of external debt from military spending by focusing on domestic arms production, mitigating their risk that way. [ABSTRACT FROM AUTHOR]

Despite the axiom “giant of Africa” is a phrase that has not reflected in Nigeria's development. The study explains the multiple variants of challenges ranging from deficit in infrastructural development to widespread corruption among public servants in aftermath of Covid-19 experience in Nigeria. Amidst of these challenges comes the global pandemic outbreak called the corona virus (Covid-19). The African continent especially Nigeria has been on lockdown since March 2020 to this very day. This lockdown is one of the measures put in place by the federal government to halt the spread of this deadly virus in Nigeria. The lockdown has resulted in social dislocation, a great loss in capital formation, increased poverty rate, stunted economic growth, increased external debt, and loss of human life. This study analyzes the impact of COVID-19 amidst the development challenges of Nigeria. The study adopted the theory of social production of material wealth which implicated the state of Nigeria's production process and development strategy. The study employs a documentary method of data collection and data are analyzed based on a content analysis procedure. The paper concludes that the COVID-19 experience in Nigeria has coincided with the character of production process and development in Nigeria. State production has become industrialized in face of this deadly virus attack in Nigeria. [ABSTRACT FROM AUTHOR]

We analyze the role of international reserves and sovereign debt in the determination and international transmission of interest rates. We develop a model that describes the money market equilibrium with capital account openness. It predicts that higher levels of international reserves lead to lower interest rates whereas the effect of higher government debt is ambiguous. We then test empirically these predictions on a panel of 128 countries over 1985–2019. We find that: (i) the transmission of U.S. interest rates to domestic interest rates is stronger in emerging market economies (EMEs) than in advanced economies (AEs) for short‐term interest rates (STIR), and vice versa for long‐term interest rates (LTIR); (ii) international reserves help counteract the transmission of the U.S. policy rate on STIR in EMEs; (iii) a higher sovereign debt level is associated with lower interest rates in EMEs (liquidity effect), but higher interest rates in developing economies (risk premium effect). [ABSTRACT FROM AUTHOR]

This paper empirically examines the heterogeneous impacts of sudden stops in international capital flows on economic growth. We identified 24 sudden stop episodes since 1990 and employed a counterfactual method with cross‐economy panel data to evaluate the impact of each episode on economic growth. The results indicate that 14 sudden stop episodes triggered significant economic decline, with varying magnitudes; 9 episodes were accompanied by insignificant economic downturn, and 1 episode was followed by economic growth. We further utilize the treatment effect derived from the counterfactual analysis to investigate the causes of these heterogeneous impacts of sudden stops on economic growth. Results obtained from the panel data model suggest that external debt, financial development, and real investment return are the main driving forces contributing to the observed heterogeneity. [ABSTRACT FROM AUTHOR]

The debt brake was introduced to limit electoral spending excesses and ensure (debt) sustainability. Although the debt ratio has been reduced, this has come at the cost of an investment backlog and persistent current account surpluses. The reason for this is the household savings surplus that cannot be utilised domestically. If these savings exceed the capital requirements of companies, either government debt or foreign debt inevitably increases. Consequently, the reduction in the debt ratio in recent years has led to higher foreign debt. In light of low interest rates, higher investments will benefit future generations more than lower debt levels. [ABSTRACT FROM AUTHOR]

This study investigates the dynamic relationship between trade openness, external debt, and economic growth in Sub-Saharan Africa, focusing on the period from 1990 to 2023. The research examines how trade openness and external debt impact regional economic performance by employing Panel Autoregressive distributed lag (ARDL) techniques utilizing the pool mean group and mean group estimator's approach. The analysis reveals that while trade openness does not stimulate economic growth, external debt similarly has significant challenges, often hindering long-term development prospects within Sub-Saharan African countries. The findings underscore the importance of managing debt sustainably and aligning trade policies with growth-enhancing strategies. Additionally, human capital and institutional quality are essential endogenous growth factors that significantly influence economic growth in Sub-Saharan Africa. The study recommends that while trade openness alone may not directly drive economic growth, its benefits can be amplified by complementary strategies such as investing in human capital, technological adoption, and industrial policy. The study concludes with policy recommendations to enhance economic resilience and foster sustainable growth, such as attracting foreign direct investment, combined with infrastructure development and sound fiscal management. [ABSTRACT FROM AUTHOR]

A dual holder simultaneously owns (private) debt and equity in the same firm. Private debt has a tax advantage, a positive cashflow, which incentivizes its use. This cashflow leads to a lower net cost of debt, which again reduces default risk as well as the cost of external debt. The usual trade‐off between tax benefits and bankruptcy costs is altered. Debt priority affects both financing and default decisions. We find that an enterprise‐value maximizing firm should issue senior, external debt and junior, private debt, rather than debt with pari‐passu priority. Our analysis further highlights that tax authorities can effectively curtail the tax‐motivated use of private debt through straightforward measures. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to empirically investigate how external debt vulnerability has affected the economy of emerging countries over time, with particular reference to Sub-Saharan African countries. It also deals with the policy issues associated with the economic effects. Design/methodology/approach: The techniques of dynamic ordinary least squares and fully modified ordinary least squares are used in this investigation, covering the period 1990–2022. A panel of 43 Sub-Saharan African countries is used in the study. Findings: The estimation results reveal that external debt vulnerability impacted negatively on economic growth, thus validating the concerns raised about the debt problem in Sub-Saharan Africa. Furthermore, the results revealed that domestic credit and openness of economy played a passive role and were therefore unable to cushion the adverse effect of debt vulnerability. Capital stock, however, stands out as the only variable that played a significant positive role in facilitating economic growth. The results are considered to be highly reliable for short-term forecast of economic growth and formulation of relevant policies. Originality/value: Over the years, economic analysts and stakeholders have expressed concern about the inadequate ratio of foreign reserves to external debt in developing countries. The effect of this external debt vulnerability on the economy of these countries has yet to be given sufficient attention by researchers. In view of this perceived void, this current study is carried out to determine the economic and policy consequences of the problem. [ABSTRACT FROM AUTHOR]

The main goal of this article is to analyse the effects of external debt accumulation on economic growth amongst Central Asian countries. We have applied a time-series methodology utilising annual data from 2000–2017 to show that external debt has had a negative and significant effect on economic growth in Central Asian countries. We found that debt overhang will cause a higher marginal tax rate on the future output of each country, thus leading to an investment slowdown and reducing output growth by limiting productivity expansion. Moreover, we can affirm that the negative effect of external debt is often associated with the poor level of institutions and governance of Central Asian countries. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the factors that contribute to the external debt growth in Ghana. Design/methodology/approach: The study adopts the autoregressive distributed lag (ARDL) model and the error correction model (ECM) to establish the short-run and long-run relationships between the dependent variable (external debt) and the independent variables (debt service, exchange rate, gross domestic product, government expenditure, import and trade openness), using a time series data spanning from 1990 to 2019. Findings: The results indicate that debt service, GDP, government expenditure and trade openness have a positive and significant relationship with external debt, while import and exchange rates have a negative relationship with external debt in the long run. In the short run, debt service, import, exchange rate and trade openness have a positive and significant relationship with external debt, while GDP has a negative relationship with external debt. Practical implications: The study found that variables such as government expenditure, debt service and import contribute significantly to the nation's external debt stock. These findings suggest that policymakers should focus on prioritising and cutting down expenditure in their quest to curtail the debt menace facing the nation. Since existing debt service has the tendency of influencing debt stock, it is recommended that government should reduce borrowing in order avoid debt trap. Home-grown policies to reduce imports must also be encouraged. As these drivers of external debt are tackled head-on, Ghana can be rightly positioned to record lower levels of public debt and subsequently reap the benefits of economic growth. Originality/value: The study adds to the public debt literature, specifically addressing the idiosyncratic determinants of external debt within the Ghanaian context. [ABSTRACT FROM AUTHOR]

Copyright of Arab Gulf Journal of Scientific Research is the property of Arabian Gulf University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Based on a sample of 124 developing countries over the period 1980–2016, we find that default increases inequality. This result, which passes a series of robustness tests, is sensitive to the size of the debt in default, the duration of the default episode, the institutional quality, the level of development, and the type of default (on external or domestic debt) and may persist until 5 years after the end of the default episode. Besides, the declines in redistributive capacity characterized by lower taxes and subsidies and social spending are identified as channels through which default increases inequality in default countries vis-à-vis nondefault countries. Finally, additional results show that default also raises wealth inequality. [ABSTRACT FROM AUTHOR]

In early March 1951, the Chancellor of West Germany, Konrad Adenauer, announced to the three Western powers occupying his country – the United States, Great Britain, and France – that his government was ready to acquiesce to their demands and settle the external debts Germany had accumulated before and after World War II. This announcement was made at roughly the same time that Israel presented its claim for reparations, which was added onto two other kinds of compensation claims the Jewish world had been already promoting in the aftermath of the Holocaust: claims for restitution of property and personal indemnification. The Israeli Ministry of Foreign Affairs (IMFA) was gravely worried about the possibility that West Germany would not be able to settle its moral debt to the Jewish people and the Jewish state due to the need to repay its commercial debts in the international arena. The present article examines the policy implemented by Israel with the aim of avoiding such a scenario. [ABSTRACT FROM AUTHOR]

Foreign investment can mitigate the foreign exchange constraint of developing countries. It can also influence the economy's international competitiveness through appreciating or depreciating exchange rates. The exchange rate impact of domestic investment is also not straightforward and depends on some critical factors. These issues of investment often pose a policy dilemma. Against this backdrop, this paper assesses the relative impacts of foreign direct investment (FDI), domestic investment (DI), and external debt on India's real effective exchange rate and the rupee/dollar real rate for the liberalized regime for trade, investment, and exchange rates. The autoregressive distributed lag bounds testing approach to cointegration, followed by its error correction representation, finds that real exchange rate variations are associated with FDI, debt, DI, and some control variables. FDI and debt depreciate real exchange rates, indicating that these have not exacerbated the economy's international competitiveness. However, DI causes real appreciation. These findings are consistent across estimations involving alternative specifications of control variables. Offsetting impacts of FDI and DI is an interesting finding. This can stabilize the exchange rates by undermining appreciating or depreciating exchange rate trends. [ABSTRACT FROM AUTHOR]

With the rise of bonded private debt over the past 15 years, there is an increased dependency on private creditors for sovereign nations that borrow to finance their government activities. The power of private creditors gained through increased sovereign debt burdens is affecting the internal political dynamics of these borrower countries, especially in the Global South, including Latin America. A larger external debt burden creates internal political conflict around the distribution of benefits, so debt is intimately linked with politics. Standard economics literature ignores this problem by hypothesizing markets based on perfect competition. We outline a set of hypotheses regarding the relationship between creditors' political preferences in sovereign debt markets that feature "power rents," when relatively powerful foreign investors can obtain significantly higher returns by lending to smaller, weaker nations. Bringing power asymmetries into the debt discussion, we also present a research agenda for economics and political science. [ABSTRACT FROM AUTHOR]

During the Second World War, Australia received almost $2 billion worth of Lend‐Lease aid from the United States — the largest foreign debt ever incurred by the Commonwealth. The settlement terms for this debt, however, were never defined or discussed during that conflict, remaining "an uncertain obligation to be assessed by an unknown person on an unspecified day of judgment."2 This paper examines the economic, military, and geopolitical factors that shaped Australia's Lend‐Lease Settlement Agreement of June 1946. It focusses on the military aircraft which accounted for a quarter of this foreign debt. The least saleable of all Lend‐Lease surpluses, these also proved the most challenging for US and Australian negotiators. Having contested initial US claims and secured sizeable debt reductions, Lend‐Lease settlement was trumpeted by the Chifley government as a great diplomatic success. Findings from this investigation indicate instead that Australia's Lend‐Lease settlement terms were restrictive, and possibly punitive, having been substantially determined by US domestic and partisan‐political considerations. Moreover, these details and their significant implications were withheld from the public, the media, and the parliamentary opposition in the months leading to the September 1946 federal election. [ABSTRACT FROM AUTHOR]

Despite past debt relief initiatives, the external debt of Africa is rising again, and it has some new worrying features: diminishing concessionality and a rising private creditor. Sub-Saharan African countries devote a significant portion of their fiscal resources to service the debt, and this prevents them from increasing development expenditures (generally imports of strategic goods that can't be produced domestically). By adding a human development factor to the Geometry of Debt Sustainability model (GDS) (Vaggi and Prizzon 2014) and following the analytical framework of Pasinetti (1998), we assess how external debt sustainability changes when countries increase the foreign currency purchasing of health and education goods and services. Not only these types of human development expenditures are central to the Sustainable Development Goals (SDGs), but they have become even more important due to impact of the Covid-19 pandemic on many low income countries (LICs). We evaluate external debt sustainability in two African contexts: Kenya and a composite country, called Ubuntu, which is representative of Sub-Saharan Africa average indebtedness conditions. The results confirm the existence of a trade-off between debt service and human development expenditures. Even before the Covid-19 pandemic, the Sub-Saharan African countries were on unsustainable debt trajectories as the debt-to-GDP ratios would stabilize only at extremely high values. [ABSTRACT FROM AUTHOR]

Nigeria's economic growth has been a serious concern for policymakers, economics, and scholars due to the challenges of economic characteristics, consequences, and contradictions. Despite the effort made by the Central Bank of Nigeria in implementing several policies such as tightening of monetary policy rate and heavy borrowing for infrastructural development to stimulate economic growth in the past few years. The economic growth in Nigeria between 1999-2007 was 6.95 percent, between 2008-2010, it was stood 7.98 percent and it was 4.80 percent between 2011-2015 and from 2016 till day the economic growth stood at 0.81 percent. In this study, we estimate parameters to determine Nigerian economic growth in the presence of multicollinearity and outliers. We employed the FMKL-GLD quantile model to quarterly data from 1986 to 2021 obtained from the Central Bank of Nigeria. Exploratory data analysis (EDA) and diagnostic test carried out ascertained the presence of multicollinearity and outlier. However, it was discovered that in model that INDT, RINR, REXR and OPEN contributed positively to the economic growth to the turn of 0.15%, 0.24%, 0.06% and 1.76% while, it was revealed that EXDT contributed negatively to the economic growth in Nigeria thus, reduced economic growth by 0.02% and as such showed the tendency and potential macroeconomic variables under study as a veritable determinant of economic growth. The location, scale and space parametersbλ1,bλ2,bλ3, andbλ4 for the fitted FMKL-GLD model were -0.0253, 34.1488 -0.3303, and -0.5758. Therefore, it can be concluded based on the location, scale, and space parameters of FMKL-FGLD and GLD Q,Q plots, as well as the estimated parameter of RGDP, that FMKL-FGLD was the best model that described the economic situation in Nigeria by showing that the economy was growing in retrogressive direction and the need for drastic effort and strong will to curtail the situation. To achieve this, the adoption of economic openness to the development and growth of the economy in Nigeria is a veritable policy direction that must be strictly followed. [ABSTRACT FROM AUTHOR]

We estimate the causal effect of external debt on greenhouse gas emissions in a panel of 78 emerging market and developing economies over the 1990-2015 period. Unlike previous literature, we use external instruments to address the potential endogeneity in the relationship between external debt and greenhouse gas emissions. Specifically, we use international liquidity shocks as instrumental variables for external debt. We find that dealing with the potential endogeneity problem brings about a positive and statistically significant effect of external debt on greenhouse gas emissions: a 1 percentage point (pp.) rise in external debt as a percentage of GDP causes, on average, a 0.5% increase in greenhouse gas emissions. One possible mechanism of action could be that, as external debt increases, governments are less able to enforce environmental regulations because their main priority is to increase the tax base to pay increasing debt services or because they are captured by the private sector who owns that debt and prevented from tightening such regulations. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Al-Anbar University for Islamic Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Public private partnership in infrastructure development can be used as an 'off the balance' tool to help governments hide real fiscal problems and facilitate the transfer of debt-repayments to their succeeding administrations. Using negative binomial regressions on a panel dataset of 40 low-and middle-income countries from 1992 to 2021, the paper finds that governments which high short-term external debts in stock and flows measurements are more motivated to participate in public private partnership. The results are robust through sensitive tests on different sampled dataset. These findings reaffirm the existence of fiscally opportunistic behaviors of public sectors in public private partnership in low-and middle-income countries. Results also indicate that governments which face re-election limitations have stronger motivations to implement infrastructure projects via public private partnership. These impacts are found to be stronger in less-developed economies and in Sub-Saharan African countries. [ABSTRACT FROM AUTHOR]

During the Second World War, Australia received almost $2 billion worth of Lend‐Lease aid from the United States — the largest foreign debt ever incurred by the Commonwealth. The settlement terms for this debt, however, were never defined or discussed during that conflict, remaining "an uncertain obligation to be assessed by an unknown person on an unspecified day of judgment."2 This paper examines the economic, military, and geopolitical factors that shaped Australia's Lend‐Lease Settlement Agreement of June 1946. It focusses on the military aircraft which accounted for a quarter of this foreign debt. The least saleable of all Lend‐Lease surpluses, these also proved the most challenging for US and Australian negotiators. Having contested initial US claims and secured sizeable debt reductions, Lend‐Lease settlement was trumpeted by the Chifley government as a great diplomatic success. Findings from this investigation indicate instead that Australia's Lend‐Lease settlement terms were restrictive, and possibly punitive, having been substantially determined by US domestic and partisan‐political considerations. Moreover, these details and their significant implications were withheld from the public, the media, and the parliamentary opposition in the months leading to the September 1946 federal election. [ABSTRACT FROM AUTHOR]

Copyright of Turkish Journal of History / Tarih Dergisi is the property of Istanbul University, Department of History and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study offers unique insights into the threshold-based influence of currency devaluation (CD) on external debt sustainability (EDS) in designated Sub-Saharan African (SSA) countries. The absence of evidence from this viewpoint, particularly in SSA, inspires this new assessment. On this premise, the study utilizes two innovative estimation procedures: smooth transition regression (STR) and multiple thresholds nonlinear ARDL (MTNARDL) to estimate the sign-based and magnitude-based asymmetric influence of CD on EDS. The outcomes indicate that first, an average CD threshold of 21.1% is consistent with EDS in the designated nations; second, a small CD significantly reduces the external debt–GDP ratio and improves sustainability, while a very high CD largely worsens the EDS problem; third, in the CD regime, devaluation has more detrimental effects on external debt burden; fourth, exceedingly large changes in exchange rate (whether positive or negative) essentially affect the countries’ EDS negatively; and fifth, the adverse effect of large depreciation on EDS is greater than that of large appreciation. The study recommends, amongst others, that heavily indebted countries with sizeable external debt denominated in foreign currency should, as a matter of urgency, avoid excessive and escalated large percentages of devaluation or exchange rate depreciation. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of capital flight on economic growth in Africa using 54 African countries from 2000 to 2021. The study employed the GMM and the dynamic panel threshold regression estimation techniques. GMM results revealed that capital flight negatively and significantly affects economic growth in Africa. The study also revealed that external debt repayment and outward foreign direct investment, proxies of capital flight, have a negative and significant effect on economic growth in Africa, except foreign portfolio investment outflow, which positively and insignificantly influences economic growth. Again, the dynamic panel threshold estimation results also revealed that capital flight negatively affects economic growth at all levels of capital flight in Africa. The study also revealed that all the proxies of capital flight, external debt repayments, foreign portfolio investment outflows, and outward foreign direct investment negatively and significantly affect economic growth above a certain threshold. However, external debt repayment has an insignificant negative effect on economic growth below the threshold in Africa. Based on the findings, African countries should implement stringent policies to curb capital flight and regulate external debt repayments and outward foreign direct investment to enhance economic growth. [ABSTRACT FROM AUTHOR]

En este artículo se investigaron los efectos del descalce cambiario en los beneficios de 201 empresas no financieras brasileñas que cotizan en bolsa, en el período de 2010 a 2018. Se construyó una medida de descalce cambiario a partir de la recopilación de los valores de contratos de derivados de divisas, con los que se creó una base de datos inédita. Los resultados indican que la devaluación del tipo de cambio tiene un efecto diferencial negativo para las empresas endeudadas en moneda extranjera, incluidas las empresas exportadoras. Al controlar por variables que protegen a las empresas endeudadas en moneda extranjera, se observa que el efecto diferencial de la devaluación es negativo para las empresas con mayor pasivo en moneda extranjera y positivo para las empresas con mayor activo en moneda extranjera o mayor nivel de cobertura (hedge). Estos resultados son robustos a diferentes especificaciones. [ABSTRACT FROM AUTHOR]

En este artículo se analizan los logros de Colombia en materia de crecimiento económico desde comienzos del siglo XX, la evolución de las políticas públicas que contribuyeron a alcanzarlos y los principales efectos sobre el desarrollo social y las desigualdades regionales. El desempeño económico se divide en tres períodos: 1905-1929, 1930-1980 y 1981-2023. El primero se caracterizó por la expansión cafetera, un auge de la inversión en infraestructura física y el comienzo de la explotación petrolera. En el segundo se consolidó el desarrollo industrial y se diversificaron la producción agrícola y las exportaciones. El último se caracterizó por la combinación de un Estado con mayor prestación de servicios sociales e impulsor de la descentralización, y la liberalización del comercio exterior y del sistema financiero. Sus resultados en materia económica fueron la desindustrialización, la reprimarización exportadora, cuyo principal producto fue el petróleo, y la mayor volatilidad macroeconómica. [ABSTRACT FROM AUTHOR]

The study examines the distributional implications of capital account restrictions on three important welfare measurements of concern for policymakers: income inequality, poverty, and external debt. Two approaches are followed, the Autoregressive Distributed Lag (ARDL), and the local projections regression with impulse response functions (IRFs), and applied to a panel data for 102 countries from 1995 to 2019. First, we identify the capital control periods, and second, we follow behavior of these three measurements after these periods. The results show a decline in income inequality and poverty and a decline in debt to foreigners. However, four pathways can affect the intensity of capital controls impacts. First, the financial development and the strength of the financial institutions have a significant role in shaping how these three welfare measurements respond to capital control reforms, specifically over 5 years. Second, capital controls can reduce financial crisis probability, and with tighter capital controls particularly following the 2008 financial crisis, the impacts become clearer. Third, the bargaining power of the labor market is strengthened in the aftermath of controls and consequently reduces inequality and poverty. Finally, through the cost of international debt, capital controls establish a new channel lowering foreign debt. [ABSTRACT FROM AUTHOR]

This study aims to test the endogeneity among green growth, foreign debt, and aging population for Indonesia and Malaysia using a vector autoregression approach from 1975 to 2023. This study can provide important insights into how economic and demographic factors interact in the context of green growth and foreign debt, as well as offer more informed policy recommendations for both countries. Endogeneity analysis in this context will help design more effective and adaptive policies to address global and local economic dynamics toward achieving sustainable development goals. The key findings of this study indicate similar results in both countries, showing causality between the aging population and foreign debt. Furthermore, there is a one-way relationship where only green growth affects foreign debt. Additionally, there are divergent findings between the two countries: green growth and aging population do not influence each other in Indonesia, whereas in Malaysia, it is only aging population that affects green growth. Recommendations from this study suggest that both countries need to promote sustainable health for aging populations through the development of productive investments and risk management in the use of foreign debt. [ABSTRACT FROM AUTHOR]

This paper analyses the impact of US monetary policy on external debt and credit growth in emerging market economies (EMEs) during the COVID-19 period. Using quarterly data from 13 EMEs and employing a panel autoregressive methodology, the study reveals the following key findings: First, global monetary policy plays a vital role in determining external debt and credit availability in EMEs during the COVID-19 period. Second, the global monetary expansion during the COVID-19 crisis led to the accumulation of external debt through the risk-taking channel of the exchange rate. Third, weak domestic monetary policy transmission hinders the stabilization of credit growth. The empirical findings suggest that the central bankers to choose an optimum policy mix to stabilize the economy during crisis. [ABSTRACT FROM AUTHOR]

We examine the factors determining cross-border debt issuance by banks using a unique dataset on international banks issuing debt through special purpose entities (SPEs). Our results indicate that such debt issuance is consistently explained by bank size and leverage. We also find that cross-border SPE debt issuance is associated with more stringent capital flow policies and macro-prudential regulation in the bank's home country, and incentivised by higher domestic corporate taxation and herding behaviour. These findings suggest potential implications for financial stability in that cross-border debt funding through SPEs may involve a relatively opaque build-up of leverage beyond the banking perimeter. [ABSTRACT FROM AUTHOR]

Public debt and its development are key questions of public sector economics and fiscal policy. This paper uses the Synthetic Control Method to study how different large-scale steps of European integration and the establishment of the EU fiscal framework have affected government debt in EU Member States. The results point to a notable debt-restricting effect of EU membership and the introduction of the Stability and Growth Pact for a large majority of the studied country groupings as well as for individual countries. Outside of a few individual countries, the actual government debt levels are substantially lower than in the synthetic alternatives. [ABSTRACT FROM AUTHOR]

The public sectors in many developing countries receive capital inflows from advanced countries. Notably, we show that higher levels of foreign borrowing play an important role in promoting economic activity in developing countries by relieving crowding out problems from local sovereign debt. Moreover, in comparison to previous contributions, we also show how participation affects economic activity in advanced countries. Using a micro‐founded two‐country model of money and banking, we show that there are crowding‐out effects in high income economies when the advanced country funds official foreign debt. Moreover, we find that there are significant implications for the effects of monetary policy when banks in the developed world hold more official foreign debt. In addition, the typical destructive effects of money growth in developing countries are weaker in the presence of higher levels of international borrowing. By comparison, the effects of monetary stimulus in the advanced country become more pronounced as banks hold more foreign bonds. Our analysis concludes by looking at optimal debt policy. Interestingly, the results suggest that developing countries should limit their reliance on foreign capital inflows. [ABSTRACT FROM AUTHOR]

This study investigates the intricate relationship between external debt, debt service, and economic growth by using the panel data of 32 Asian Developing Economies (ADE) spanning 1995 to 2020. Employing a two-step system generalized method of moments (GMM) and a dynamic common correlated estimate (DCCE) model, the research explores key macroeconomic channels through which debt influences growth and rigorously tests for debt overhang and crowding-out effects. Findings reveal that public and private investment, total factor productivity, and national savings are pivotal channels transmitting the non-linear effect of external debt on economic growth. Notably, only private and public investment convey the non-linear effects of debt service to economic growth, while productivity and savings convey the linear effect. Evidence of debt overhang and crowding-out effects is identified in the sampled economies. The study suggests strategic measures for developing countries, emphasizing the productive use of accumulated debt, enhanced debt management, and timely project completion. Furthermore, it advocates for fostering economic growth through increased productivity, domestic savings, and private sector expansion to reduce dependence on foreign debt, facilitating both debt repayment and economic self-sufficiency. Plain language summary: This study explores the intricate links among external debt, debt service, and economic growth in 32 Asian Developing Economies from 1995 to 2020. Using advanced statistical methods like the two-step system generalized method of moments (GMM) and a dynamic common correlated estimate (DCCE) model, the research investigates various macroeconomic pathways, specifically testing for non-linear effects such as debt overhang and crowding-out. Key findings emphasize the significance of public and private investment, total factor productivity, and national savings as pivotal channels for the non-linear impact of external debt on economic growth. Notably, the study reveals that private and public investment exhibit non-linear effects in response to debt service, while productivity and savings show linear effects. The research recommends strategic approaches for developing countries, focusing on judicious debt management, timely project completion, and initiatives to boost productivity, domestic savings, and private sector growth, thereby reducing reliance on foreign debt. Acknowledging valuable insights, the study recognizes limitations in the available data from 32 countries and emphasizes the need for further investigation into mediating and moderating variables in the relationship between external debt and economic growth. Particularly in the context of foreign debt financing policies, the study underscores the importance of exploring threshold values for negative impacts on transmission channels, suggesting avenues for future research to provide a more nuanced understanding of the dynamics involved. In essence, the study offers valuable insights into the nuanced relationship between external debt and economic growth, along with strategic recommendations for sustainable development in developing economies. [ABSTRACT FROM AUTHOR]

Populism is principally a political phenomenon; yet, the economic implications of populist rule can be substantial, as underlined by the Polish and Hungarian cases. By operationalizing the ideational definition of populism, the article sheds light on the economic consequences of populist governance in three major domains: (1) macroeconomic management, (2) welfare policies, and (3) market regulation. The article demonstrates that while—at least until the outbreak of the COVID-19 pandemic—Hungary and Poland refrained from engaging in irresponsible macroeconomic policies such as the accumulation of public debt or external debt (typical signs of classical "economic populism"), the governments of the two countries embarked on widescale income and wealth redistribution in their respective economies. Nevertheless, these populist governments targeted different groups of people in their redistributive policies: Hungary adopted a largely selective and exclusive social policy targeting the middle class and the well off, while Poland endorsed a more inclusive strategy that benefited the poor as well. Furthermore, the two countries deliberately tilted the playing field toward their protégés: Hungary preferred the preservation of private property; whereas, Poland explicitly increased the share and role of state-owned enterprises in the economy. [ABSTRACT FROM AUTHOR]

The relationship between external debt and economic growth has been extensively studied by researchers and policymakers. However, the link between external debt and domestic investment remains an underexplored area of research. Therefore, this paper investigates the nexus between external debt and domestic investment, using institutional quality as a moderator. The sample consists of 47 sub-Saharan African countries with data spanning from 1996 to 2021. The empirical findings from conventional and robust estimators indicate that external debt negatively and significantly hampers domestic investment, while institutional quality plays a significant moderating role in this relationship. Additionally, the benefits of debt can only be realized by the SSA region when the average quality of institutions is above − 1.174 on the scale of − 2.5 to 2.5. The in-depth analysis offers insights that high-quality institutions (above a certain threshold) can help countries leverage debt for positive outcomes by promoting efficient resource allocation and attracting further investment. Thus, policymakers are advised to uphold debt management strategies and institutional reforms, such as reducing corruption, improving property rights, and strengthening the rule of law, to ensure transparency in debt use and maintain a sustainable debt burden. This will create a more attractive environment for both domestic and foreign investment. The results remain robust to alternative methodologies. [ABSTRACT FROM AUTHOR]

This study aims to analyze the effect of banking stability, exchange rates, and external debt on economic growth in BRICS countries (Brazil, Russia, India, China, and South Africa) during the period 2011-2020. The data used in this study is panel data from five BRICS countries, obtained from the International Monetary Fund (IMF) and the World Bank. The method used is a panel data regression model using the Fixed Effect method. This model makes it possible to account for the fixed effects of time as well as the fixed effects of individual states in regression analysis. The results of the analysis show that banking stability has a significant negative influence on economic growth in BRICS countries. On the other hand, exchange rates and external debt have a significant positive impact on economic growth. These findings indicate that policies that promote banking stability, prudent exchange rate management, and effective use of external debt can support sustainable economic growth in BRICS countries. The results of the analysis show that banking stability has a significant negative influence on economic growth in BRICS countries. On the other hand, exchange rates and external debt have a significant positive impact on economic growth. These findings indicate that policies that promote banking stability, prudent exchange rate management, and effective use of external debt can support sustainable economic growth in BRICS countries. [ABSTRACT FROM AUTHOR]

In the literature, studies on the relationship between external debt and economic growth are generally shaped around general theoretical and empirical frameworks. This study aims to shed light on the special conditions of the relationship in this region by addressing the external debt structure and economic growth performance of Central Asian countries. Although Central Asian countries entered the independence process with zero debt in 1991, they have received significant foreign debt and aid. The study aims to empirically analyze the relationship between external debt and economic growth in Central Asian countries based on available statistical data. In the application part of the study, the relationship between the variables was examined with the Westerlund (2007) cointegration test using data from 1995-2022 in Central Asian countries. The panel FMOLS method was used to estimate long-term coefficients between variables. According to the results, the long-term regression coefficient between external debt and economic growth in Central Asian countries is - 0.1493. This means that when the external debt stock increases by 1% in these countries, economic growth decreases by approximately 0.15%. When evaluated on a country basis, the relationship between external debt and economic growth was negative in Kazakhstan, Kyrgyzstan, and Tajikistan, while it was positive in Uzbekistan. The results found for Turkmenistan are statistically insignificant. The findings are expected to guide economic policymakers, academics and international stakeholders. [ABSTRACT FROM AUTHOR]

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External public debt exacerbation and macroeconomic destabilization in Laos are attributed to the subsequent complications of excessive foreign capital investments in the mining, power, and transport infrastructure sectors during the economic boom of the 2010s. This study examines the Lao economy from three perspectives: real sector growth, the characteristics of external fundraising, and the domestic financial system. Our findings suggest that the external debt issue still appears to be under control, real sector growth is expected to be strong in the medium term, and the less‐developed financial system has not realized its potential for fiscal financing and macroeconomic stability. [ABSTRACT FROM AUTHOR]

This study analyzes the size, behavior, and responsible factors behind the balance of payments (BOP) problems in Afghanistan from 2004 to 2020. Since the impact of the real indicators on the BOP of Afghanistan still remains unexplored, this article comprehensively analyzes the primary responsible factors for the BOP problems in Afghanistan. First, a comprehensive critical analysis of the BOP and its components is performed. Second, the autoregressive distributed lag (ARDL) model is conducted to empirically scrutinize the influence of fiscal policy variables like government spending (GEX), tax on international trade (TIT), external debt (EXD), and GDP on the BOP. The empirical results revealed that GDP has a significantly positive impact on Afghanistan's BOP in the long run, whereas the influence of GEX on the BOP is significantly negative. Furthermore, it was found that TIT and EXD have insignificant association with BOP. Although there is a meaningful convergence towards long-run equilibrium with an adjustment speed of 94.95% in each period, none of the covariates has a significant effect on the BOP in the short run. Furthermore, the Granger causality test exposed a bidirectional causality between GEX and BOP and a one-way causation from GDP to BOP. The study recommends structural changes in the economy to increase domestic production and improvements in the composition and direction of exports and imports, redirect government spending in favor of domestic producers, and source external debt with improved debt conditions. [ABSTRACT FROM AUTHOR]

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According to the IMF, the current public debt makes up nearly 40 percent of the global debt, marking the highest share since the mid-1960s. Despite the vast research on alarming levels of sovereign default, the literature remains inconclusive. This paper investigates macroeconomic, financial, and political determinants of IMF credit use in the post-2010 era. The main contribution of our study lies in its temporal analysis as we investigate how the robustness of different factors has evolved. By utilizing an extensive dataset on 216 countries over the period of 2010–2021 and employing a variant of the Extreme Bounds Analysis (EBA) method, our study reveals that fluctuations in the IMF credit to external debt ratio can be attributed to changes in the total reserves to external debt ratio, where this relationship is statistically significant and reliable. However, high political risks seem to no longer affect the IMF's decision, post 2010. Furthermore, our findings demonstrate that excluding countries with low debt arrears strengthens the results' robustness. These findings contribute to a better understanding of the complexities surrounding IMF credit use in the contemporary global economic scene and offer new standpoints on the Fund's lending choices. [ABSTRACT FROM AUTHOR]