Primary Surpluses And Sustainable Debt Levels In Emerging Market Countries
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Primary Surpluses And Sustainable Debt Levels In Emerging Market Countries
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Author : Mr.Abdul Abiad
language : en
Publisher: International Monetary Fund
Release Date : 2005-10-01
Primary Surpluses And Sustainable Debt Levels In Emerging Market Countries written by Mr.Abdul Abiad and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005-10-01 with Business & Economics categories.
This paper aims to put some constraints on the way primary surpluses are projected when making assessments of public debt sustainability. Projections should be tied either to the country's historical track record in generating surpluses-if the institutional and other factors accounting for this track record are expected to persist-or to some model that links primary surpluses to their fundamental determinants, either on the basis of constant institutions and policies or a credible reform program. History-based or model-based primary surplus projections provide a useful benchmark for judging the realism of fiscal forecasts underlying debt sustainability calculations. Together with information on future growth and interest rates, the primary surplus projections can be used to generate measures of overborrowing, and the magnitude of adjustment needed to return debt to a sustainable level.
The Impact Of Debt Sustainability And The Level Of Debt On Emerging Markets Spreads
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Author : Nazim Belhocine
language : en
Publisher: International Monetary Fund
Release Date : 2013-05-01
The Impact Of Debt Sustainability And The Level Of Debt On Emerging Markets Spreads written by Nazim Belhocine and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-05-01 with Business & Economics categories.
How do financial markets respond to concerns over debt sustainability and the level of public debt in emerging markets? We introduce a measure of debt sustainability – the difference between the debt stabilizing primary balance and the primary balance–in an otherwise standard spread regression model applied to a panel of 26 emerging market economies. We find that debt sustainability is an important determinant of spreads. In addition, using a panel smooth transition regression model, we find that the sensitivity of spreads to debt sustainability doubles as public debt increases above 45 percent of GDP. These results suggest that market interest rates react more to debt sustainability concerns in a country with a high level of debt compared to a country with a low level of debt.
Primary Surplus Behavior And Risks To Fiscal Sustainability In Emerging Market Countries A Fan Chart Approach
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Author : Xavier Debrun
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2006-03-01
Primary Surplus Behavior And Risks To Fiscal Sustainability In Emerging Market Countries A Fan Chart Approach written by Xavier Debrun and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006-03-01 with categories.
This paper proposes a probabilistic approach to public debt sustainability analysis (DSA) using "fan charts." These depict the magnitude of risks-upside and downside-surrounding public debt projections as a result of uncertain economic conditions and policies. We propose a simulation algorithm for the path of public debt under realistic shock configurations, combining pure economic disturbances (to growth, interest rates, and exchange rates), the endogenous policy response to these, and the possible shocks arising from fiscal policy itself. The paper emphasizes the role of fiscal behavior, as well as the structure of disturbances facing the economy and due to fiscal policy, in shaping the risk profile of public debt. Fan charts for debt are derived from the "marriage" between the pattern of shocks on the one hand and the endogenous response of fiscal policy on the other. Applications to Argentina, Brazil, Mexico, South Africa, and Turkey are used to illustrate the approach and its limitations.
Public Debt In Developing Countries
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Author : Indermit Singh Gill
language : en
Publisher: World Bank Publications
Release Date : 2005
Public Debt In Developing Countries written by Indermit Singh Gill and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Debts, Public categories.
"Over the past 25 years, significant levels of public debt and external finance are more likely to have enhanced macroeconomic vulnerability than economic growth in developing countries. This applies not just to countries with a history of high inflation and past default, but also to those in East Asia, with a long tradition of prudent macroeconomic policies and rapid growth. The authors examine why with the help of a conceptual framework drawn from the growth, capital flows, and crisis literature for developing countries with access to the international capital markets (market access countries or MACs). They find that, while the chances of another generalized debt crisis have receded since the turbulence of the late 1990s, sovereign debt is indeed constraining growth in MACs, especially those with debt sustainability problems ... " -- Cover verso.
Safe Debt And Uncertainty In Emerging Markets
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Author : Mr.Magnus Saxegaard
language : en
Publisher: International Monetary Fund
Release Date : 2014-12-19
Safe Debt And Uncertainty In Emerging Markets written by Mr.Magnus Saxegaard and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-12-19 with Business & Economics categories.
This paper develops a methodology for estimating a safe public debt level that would allow countries to remain below a maximum sustainable debt limit, taking into account the impact of uncertainty. Our analysis implies that fiscal policy should target a debt level well below the debt ceiling to allow space to absorb shocks that are likely to hit the economy. To illustrate our findings we apply the methodology to estimate a safe debt level for South Africa. Our results suggest that South Africa’s debt ceiling is around 60 percent of GDP, although uncertainty is high. Simulations suggest targeting a debt-to-GDP ratio of 40 percent of GDP would allow South Africa to remain below this debt ceiling over the medium-term with a high degree of confidence.
Debt Sustainability In Emerging Markets
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Author : Yilmaz Akyüz
language : en
Publisher:
Release Date : 2007
Debt Sustainability In Emerging Markets written by Yilmaz Akyüz and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
This paper critically assesses the standard IMF analytical framework for debt sustainability in emerging markets. It focuses on complementarities and trade-offs between fiscal and external sustainability, and interactions and feedbacks among policy and endogenous variables affecting debt ratios. It examines current fragilities in emerging markets and notes that domestic debt is of concern. Despite favourable conditions, many governments are unable to generate a large enough primary surplus to stabilize public debt ratios. Worsening global financial conditions may create difficulties for budgetary transfers, posing greater challenges to government debt management since restructuring often is more difficult for domestic than external debt.
Public Debt Sustainability In Developing Asia
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Author : Benno Ferrarini
language : en
Publisher: Routledge
Release Date : 2012-11-12
Public Debt Sustainability In Developing Asia written by Benno Ferrarini and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-11-12 with Business & Economics categories.
Addressing the Global Financial Crisis required fiscal intervention on a substantial scale by governments around the world. The consequent build up of public debt, in particular its sustainability, have moved centre stage in the policy debate. If the Asia Pacific region is to continue to serve as an engine for global growth its public debt must be sustainable. The book addresses this issue for Asia Pacific as a whole as well as for three of the most dynamic economies in the region: China, India and Vietnam. The book begins with a discussion of the reasons why there is increased attention on debt related issues and outline the contents of the volume. The book also includes fiscal indicators for Developing Member Countries (DMCs) as categorized by the Asian Development Bank (ADB). Debt sustainability for these countries is assessed through extant approaches and with the most updated data sources. It also surveys the extant literature on debt sustainability, outlining the main issues related to debt sustainability and discusses the key implications for the application of debt sustainability analysis in developing Asia. The book highlights the importance of doing individual country studies in view of wide variations in definitions of public expenditure, revenues, contingent liabilities, government structures (e.g. federal), and the like as well as in the impact of debt on interest rates. It provides in-depth debt sustainability analyses of China, India and Vietnam. The book is a comprehensive analytical and empirical update of the sustainability public debt in developing Asia. It breakes new ground in that various characteristics of the sustainability that have not yet been explored in the literature which, nevertheless, are crucial to understanding it. As a consequence, the policy analysis is based on firmer footings than in the extant literature and should prove useful to graduate students, researchers as well as policymakers.
Quantifying The Sustainability Of Public Debt
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Author : Cansın Kemal Can
language : en
Publisher: Cambridge Scholars Publishing
Release Date : 2021-06-09
Quantifying The Sustainability Of Public Debt written by Cansın Kemal Can and has been published by Cambridge Scholars Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-06-09 with Business & Economics categories.
Despite its beneficial aspects, public debt can be hazardous for macroeconomic performance should it reach unrepayable levels as a consequence of snowballing explosive trends. Failure to monitor the existing trend in public debt in order to detect such divergences from the stable path, and the lack of an adaptive public financial management can potentially culminate in a public debt crisis whose disruptive economic impacts can permeate all sectors of the economy very swiftly. However, public debt sustainability is a vague concept with no straightforward operational definitions. In addition, its multi-faceted nature is an impediment for the implementation of real-world appraisal of the fiscal posture from a stability viewpoint. As such, quantifying the public debt sustainability is essential for overhauling the fiscal policies so as to avoid a potential debt crisis stemming from malfunctioning fiscal policies. This book provides the reader with a practical and straightforward framework that outlines a tool for undertaking public debt sustainability analysis. In order to guide further empirical investigations, the discussion in this book is underpinned by a real-world application of the model which highlights the practical aspects of the tool with reference to time-varying empirical evidence from a developing country.
Determinants Of Investment Grade Status In Emerging Markets
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Author : Laura Jaramillo
language : en
Publisher: International Monetary Fund
Release Date : 2010-05-01
Determinants Of Investment Grade Status In Emerging Markets written by Laura Jaramillo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-05-01 with Business & Economics categories.
Emerging market countries seek investment grade status to lower financing costs for the sovereign, expand the pool of potential investors to institutional investors, and allow corporates the possibility of reducing their borrowing costs. Using a random effects binomial logit model on a sample of 48 emerging markets, the paper finds that, to a large extent, investment grade rating assignments can be explained by a handful of variables. The results also suggest that efforts by emerging markets to increase the likelihood of an upgrade should focus on debt indicators rather than the other key determinants of investment grade status.
A Risk Based Debt Sustainability Framework
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Author : Mr. Dale F. Gray
language : en
Publisher: International Monetary Fund
Release Date : 2008-02-01
A Risk Based Debt Sustainability Framework written by Mr. Dale F. Gray and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008-02-01 with Business & Economics categories.
This paper proposes a new framework for the analysis of public sector debt sustainability. The framework uses concepts and methods from modern practice of contingent claims to develop a quantitative risk-based model of sovereign credit risk. The motivation in developing this framework is to provide a clear and workable complement to traditional debt sustainability analysis which-although it has many useful applications-suffers from the inability to measure risk exposures, default probabilities and credit spreads. Importantly, this new framework can be adapted for policy analysis, including debt and reserve management.