Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Dallas
Globalization and Monetary Policy Institute Working Paper
Official Debt Restructurings and Development
Gong Cheng
Javier Diaz-Cassou
Aitor Erce
Abstract

Despite the frequency of official debt restructurings, little systematic evidence has been produced on their characteristics and implications. Using a dataset covering more than 400 Paris Club agreements, this paper fills that gap. It provides a comprehensive description of the evolving characteristics of these operations and studies their impact on debtors. The progressive introduction of new terms of treatment gradually turned the Paris Club from an institution primarily concerned with preserving creditors’ claims into an instrument to foster development in the world’s poorer nations, among other objectives. Our study finds that more generous restructuring conditions involving nominal relief are associated with an acceleration of per capita GDP growth, a reduction of poverty and inequality, and an increase in public health budgets. We also find that countries receiving nominal relief tend to receive lower aid flows subsequently, the opposite being the case for countries receiving high reductions in the net present value of their obligations, but no nominal haircuts.


Download Full text
Cite this item
Gong Cheng & Javier Diaz-Cassou & Aitor Erce, Official Debt Restructurings and Development, Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute Working Paper 339, 20 Apr 2018.
More from this series
JEL Classification:
Subject headings:
Keywords: Official debt; sovereign debt restructuring; Paris Club
DOI: 10.24149/gwp339
For corrections, contact Amy Chapman ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal