5 research outputs found
External Debt and Growth
This paper assesses the non linear impact of external debt on growth using panel data for 93�developing countries. The estimates support a non-linear, hump-shaped relationship between debt and growth, especially when the debt burden is measured relative to GDP. For a country with average indebtedness, doubling the debt ratio reduces growth by a third to a half percentage point after controlling for endogeneity. Our findings also suggest that the average impact of debt becomes negative at about 160�170 percent of exports or 35�40 percent of GDP and the marginal impact of debt at about half of these value
Exchange Rate Regimes and Financial Dollarization: Does Flexibility Reduce Bank Currency Mismatches?
Why Do Countries Peg the Way They Peg? The Determinants of Anchor Currency Choice
Conditional on choosing a pegged exchange rate regime, what determines the currency to which countries peg or “anchor” their exchange rate? This paper aims to answer this question using a panel multinomial logit framework, covering more than 100 countries for the period 1980-1998. We find that trade network externalities are a key determinant of anchor currency choice, implying that there are multiple steady states for the distribution of anchor currencies in the international monetary system. Other factors found to be related to anchor currency choice include the symmetry of output co-movement, the currency denomination of debt, and legal or colonial origins