External Conditions and Debt Sustainability in Latin America

Highly favorable external conditions have helped Latin America strengthen its economic fundamentals over the last decade. But, has the region built enough buffers to guard itself from a weakening of the external environment? This paper addresses this question by developing a simple framework that in...

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Bibliographic Details
Main Author: Adler, Gustavo
Other Authors: Sosa, Sebastian
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2013
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a External Conditions and Debt Sustainability in Latin America  |c Gustavo Adler, Sebastian Sosa 
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300 |a 51 pages 
651 4 |a Chile 
653 |a Fiscal stance 
653 |a Public debt 
653 |a Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation 
653 |a Dynamic Treatment Effect Models 
653 |a Public finance & taxation 
653 |a National Deficit Surplus 
653 |a Debt Management 
653 |a Fiscal Policy 
653 |a Debts, Public 
653 |a Open Economy Macroeconomics 
653 |a Debt 
653 |a Exports and Imports 
653 |a Diffusion Processes 
653 |a Fiscal policy 
653 |a International Lending and Debt Problems 
653 |a International economics 
653 |a External debt 
653 |a Debts, External 
653 |a Time-Series Models 
653 |a Sovereign Debt 
653 |a Macroeconomics 
653 |a Debt sustainability 
653 |a Dynamic Quantile Regressions 
653 |a State Space Models 
653 |a Public Finance 
653 |a Debt sustainability analysis 
700 1 |a Sosa, Sebastian 
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520 |a Highly favorable external conditions have helped Latin America strengthen its economic fundamentals over the last decade. But, has the region built enough buffers to guard itself from a weakening of the external environment? This paper addresses this question by developing a simple framework that integrates econometric estimates of the effect of global factors on key domestic variables that determine public and external debt dynamics, with the IMF‘s standard debt sustainability framework. Results suggest that, while some countries in the region are well placed to withstand moderate or even large shocks, many would benefit from having stronger buffers to be in a position to deploy countercyclical policies, especially under tail events. External sustainability, on the other hand, does not appear to be a source of concern for most countries