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Debt Relief and Adjustment Incentives A Theoretical Exploration

The purpose of this paper is to analyze the argument that debt relief would increase the incentive of a debtor country to make an adjustment effort (to invest) and that for this reason creditors may benefit by granting relief. It is shown that there are actually opposing incentive effects of debt re...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1988
Series:IMF Working Papers
Subjects:
International Economics
Interest Rates
Debt Service Payments
Consumption
Saving
Debt
Financial Risk Management
Banks And Banking
Macroeconomics
Sovereign Debt
Debt Management
International Lending And Debt Problems
Economics
Debt Service
Macroeconomics: Consumption
Exports And Imports
Interest Rates: Determination, Term Structure, And Effects
Finance
Debts, External
Wealth
Real Interest Rates
Debt Relief
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Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:The purpose of this paper is to analyze the argument that debt relief would increase the incentive of a debtor country to make an adjustment effort (to invest) and that for this reason creditors may benefit by granting relief. It is shown that there are actually opposing incentive effects of debt relief and that the argument could be valid in particular circumstances. A distinction is made between exogenous and endogenous relief, the latter compelled by low capacity to pay caused by low investment earlier
Physical Description:21 pages
ISBN:9781451977851

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