Compared with the relatively straightforward definition of a default event, assessing sovereign debt sustainability remains a grey area. The interaction between fiscal choices, lenders' expectations and economic uncertainty creates a setting in which-particularly when a default...

We describe a novel mechanism via which multinational enterprises (MNEs) can serve to propagate productivity and credit supply shocks across borders. We augment the costly-state-verification model of Bernanke et al. [1999] with the internal capital market constraint of an MNE to analyze the...

Emerging market economies (EMEs) regularly tap domestic and international capital markets through scheduled sovereign bond auctions. In this paper, we leverage a novel dataset covering over 75,000 sovereign issuance events and 20,000 securities from 20 EMEs between the early 2000s and 2023 to...

Domestic and foreign capital and consumption goods are imperfect substitutes in production and demand functions of the growth model by Bardhan-Lewis. We extend the model by introducing exogenous technical progress and allow for foreign debt dynamics without dropping domestic capital goods. Trade...

Fiscal sustainability refers to a government's capacity to generate sufficient revenue to cover its expenses and repay its debts without accumulating excessive liabilities or creating new money. Recent observations indicate that Kenya's economic growth has slowed, prompting concerns about its...

Once a famous tale of conquest, law and foreign bond markets, the saga of the Silesian Bonds of 1734-37 is missing from the literature on sovereign debt. The Silesian Bonds were among the earliest foreign currency sovereign bonds issued. They go into the market 84 years prior to the 1818...

This paper examines the origins, evolution, and resolution efforts surrounding Sri Lanka's 2022 sovereign debt default. Many defaults are triggered by sudden external shocks, but, in contrast, Sri Lanka's crisis was largely the result of prolonged domestic policy failures, including chronic...

This paper introduces the African Debt Database (ADD) - a new, comprehensive dataset that traces both domestic and external debt instruments at a granular level. The main innovation is a detailed mapping of Africa's domestic debt markets, drawing on rich, new data extracted from government...

This paper estimates a nonlinear asymmetric dynamics model in the threshold panel data framework to study the extent to which the quality of governance, investment, and financial stability affect the impact of external debt on economic growth in 47 African countries from 2002 to 2022. As a...

Britain's debt was nil in 1688 and 60% of GDP in 1717. From 1717 to 1722 the debt was restructured, including through the South Sea operation of 1720. I discuss the reasons for the restructuring and the tensions it revealed between taxpayers and creditors. The South Sea bubble turned the...

Public debt has increased steadily over the years, leaving many countries at risk of debt distress and even pushing some to default. This paper analyses the impact of sovereign default on post-default debtto-GDP ratios in 144 countries from 1980 to 2019. Applying the entropy balancing method, we...

The Global Emerging Markets Risk Database Consortium (GEMs) is a joint initiative between the European Investment Bank and the International Finance Corporation; it was established in 2009 to pool credit risk data. This database is a unique example of a tangible common good and is designed to...

This paper provides a comprehensive overview of China’s lending to developing countries - a central feature of today’s international financial system. Building on our previous research and the work of others, we document the scale, destination, and terms of China’s overseas lending boom,...

This paper analyses the prospects for debt stabilisation in the countries of the European Union, the United Kingdom and the United States, using two methodologies. First, we estimate the level of the structural primary balance that is required to asymptotically stabilise the debt ratio with a 70...

Leveraging a unique dataset that combines country-level information on debt restructuring with firm-level data from theWorld Bank Enterprise Surveys (WBES) spanning from 2004 to 2023, we analyze the effects of debt restructuring on firm sales growth. Using recent advancements in...

Egypt has experienced a sharp rise in external debt over the past decade, increasing from USD 55.8 billion in 2015 to over USD 165.3 billion by 2023. Despite maintaining a debt-to-GDP ratio within internationally accepted thresholds (approximately 45% in 2023), the country faces mounting...

For more than five decades, the World Bank’s premier annual publication on debt, now titled the International Debt Report (IDR), along with the associated International Debt Statistics (IDS) database, has helped shape policies in development finance by sharing timely and comprehensive external...

This paper assesses the exchange rate risk exposure of Tunisia's external public debt portfolio using the delta-normal Value at Risk (VaR) approach. Based on daily data from 2004 to 2019, focusing on the main borrowing currencies (the euro, US dollar, and Japanese yen), the study identifies the...

Romania has maintained an external deficit continuously since 1990, which represents a vulnerability of the economy. The subject analysed is important because Romania is trying to keep under control and limit the negative effects of this imbalance, especially in the context of the process of...

Research background: This study explores the impact of inflation targeting on external debt in lowincome countries, filling a gap in understanding its effects on debt management in these countries. Purpose: Our research aims to determine whether the adoption of inflation targeting can lead to a...

FinTech-based lending has rapidly expanded in emerging economies, offering convenience and inclusion but also raising concerns about over-indebtedness. In Indonesia, the surge of digital loans has been accompanied by growing signs of risky borrowing behavior, including late payments, high...

The pandemic responses and subsequent fiscal stimulus measures have eroded Thailand's fiscal space, pushing its public debt close to the ceiling of 70 percent of GDP. While this situation generally calls for fiscal prudence to reduce debt levels, it also raises questions about the adequacy of...

This paper studies the impact of central bank independence on sovereign borrowing, using an index that captures institutional constraints on central bank lending to the government across 155 countries from 1972 to 2023. The findings show that tighter lending to the executive significantly...

This report calls for radical debt transparency, to shift from current, often opaque, practices toward full and timely disclosure. Since the World Bank's first comprehensive assessment of debt transparency in developing countries in 2021, more countries now report debt data, but there are...

Debt financing is important for financing major investments in the biopharmaceutical industry. Debt financing allows companies to raise funds without giving up ownership or control through indenture and covenants of the company. In this study, I analyze the effects of debt financing decisions on...

This paper is the first comprehensive analysis of the secured lending practices of Chinese creditors in emerging market and developing economies (EMDEs). We present a new dataset and detailed case studies of collateralized public and publicly guaranteed (PPG) loans from Chinese state-owned...

We examine the effects of debt distribution characteristics, specifically skewness and maturity concentration, on sovereign yields across OECD countries over the period 1995Q1 to 2020Q4. After computing specific Lorenz curves and Gini coefficients, we find that positive skewness generally exerts...

I develop a dynamic macroeconomic model of a small open economy to identify two key vulnerabilities that prevent emerging markets from fully integrating into global markets: high financial integration costs and their low position in the international monetary hierarchy. These vulnerabilities...

South Africa has been struggling with high levels of gross debt. The COVID-19 pandemic has worsened as the government has had to adjust its budget continuously, resulting in fiscal stance and debt sustainability becoming a matter of concern. This research aims to assess the possible asymmetric...