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Adoption of an IMF programme and debt rescheduling: an empirical analysis

By Silvia Marchesi

Abstract

The existence of an empirical relationship between the adoption of an IMF programme and the concession of a debt rescheduling by commercial and official creditors is tested using a bivariate probit model. If countries who have arrangements with the IMF are more likely than others to obtain a rescheduling of their external debt we could conclude that the adoption of an IMF programme could work as a sort of signal of a country’s “good willingness”, which is thus rewarded with the debt relief. The results confirm the existence of a significant effect of the adoption of an IMF programme on the subsequent concession of a debt rescheduling by creditors

Topics: HJ
Publisher: University of Warwick, Department of Economics
Year: 1999
OAI identifier: oai:wrap.warwick.ac.uk:1634

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