We develop a model to study the macroeconomic effects of public investment surges in low-income countries, making explicit: (i) the investment-growth linkages; (ii) public external and domestic debt accumulation; (iii) the fiscal policy reactions necessary to ensure debt-sustainability; and (iv)...

The economic development of Hungary after the economic crisis is discussed. Hungary’s economic program supported by Stand-By Arrangement has been successful in strengthening the economy and stabilizing market conditions. Given Hungary’s high public debt and large financing needs,...

We examine the effects that international commodity price shocks have on external debt using panel data for a world sample of 93 countries spanning the period 1970-2007. Our main finding is that positive commodity price shocks lead to a significant reduction in the level of external debt in...

In 2008–09, economic activity in Burkina Faso was negatively affected by the increase in global food and fuel prices, the global economic and financial crisis, and heavy flooding in Ouagadougou in September 2009. These shocks are estimated to have contributed to a deterioration in poverty...

Low-income countries continue to face significant challenges in meeting their vast development needs while maintaining a sustainable debt position, even after many of these countries have benefited from substantial debt relief. These challenges are further exacerbated by changes in the financial...

Recent literature argues that conflict in shifting adjustment costs between different socioeconomic groups delays necessary reforms and finds that such reforms often follow economic crises. This paper expands these models by including external borrowing by the private sector and shows that this...

Public debt in the Middle East increased during the mid-1990s mainly because of fiscal expansions. It decreased in recent years, thanks to high oil revenue, economic growth, some primary non-oil fiscal adjustment, and debt relief. While countries in the Middle East appear to have adequately...

The 2006 Article IV consultation underlies policy issues, including fiscal policy, monetary policy, and structural issues of the Republic of Croatia. Although bank restructuring and privatization have strengthened the financial sector, strong credit expansion and foreign exchange-induced credit...

This 2006 Article IV Consultation highlights that Malawi is at a critical juncture following its progress on macroeconomic stability, attainment of the Heavily Indebted Poor Countries (HIPC) completion point in August 2006, and the recent launch of the Malawi Growth and Development Strategy,...

The staff report for the Second Review Under the Stand-By Arrangement (SBA) on the Republic of Croatia highlights fiscal policy and monetary and financial sector policies. The policy implementation under this SBA has yielded sizable fiscal consolidation and advances in structural reforms,...