Debt sustainability of the Argentine Republic: Problems and prospects

2020 ◽  
Vol 26 (10) ◽  
pp. 2346-2363
Author(s):  
A.V. Kuznetsov ◽  
S.A. Morozov
Keyword(s):  
Central Bank ◽  
Economic Consequences ◽  
Debt Sustainability ◽  
Distinctive Features ◽  
Debt Burden ◽  
Political Risks ◽  
Long Run ◽  
Argentine Republic ◽  
Fiscal And Monetary Policy ◽  
The Imf

Subject. The article reveals the relationship between the increasing cost of servicing the current government debt and ensuring the debt sustainability of default economy, on the case of the Argentine Republic. Objectives. The study aims at conducting a comprehensive analysis of origins and mechanisms for resolving debt crises in the Argentine Republic. Methods. The study rests on methods of analysis, synthesis and extrapolation, using the database of the IMF, the Ministry of Economy, and the Central Bank of Argentina. Results. We discuss the approaches of the administration and the Central Bank of Argentina to the implementation of anti-crisis fiscal and monetary policy, reveal the details of Argentina's interaction with the IMF in providing assistance in the financial stabilization of the economy, show the economic consequences of excessive debt burden, present the data on the repayment of Argentina's public debt in the long run. The paper summarizes the distinctive features of the current debt of Argentina restructuring, including the increasing socio-economic and political risks. Conclusions. The distrust in debt securities and creditworthiness in the Argentine Republic increases the risk of serial default. The lack of the State's ability to provide financial support to the national corporate sector is reflected at the level of poverty, unemployment, and, as a result, it has an impact on the mood of the population, which threatens the intensity of riots that may spread outside the Argentine Republic.

scholarly journals Can Pakistan Raise More External Debt? A Fiscal Reaction Approach

2020 ◽  
Vol 12 (4) ◽  
pp. 21-42
Author(s):  
Sadia Mansoor ◽  
Mirza Aqeel baig ◽  
Irfan Lal
Keyword(s):  
External Debt ◽  
Negative Relationship ◽  
Macroeconomic Policies ◽  
Debt Sustainability ◽  
Debt Burden ◽  
Long Run ◽  
Significant Negative Relationship ◽  
Fiscal Reaction Function ◽  
Debt Policy

This study has assessed the role of existing policies in determining the state of debt sustainability for the Pakistan economy (1980- June 2019) through fiscal reaction function. This study adds to the literature in two aspects. First, a policy index has been constructed to formulate a debt-policy interactive term that implies whether or not existing macroeconomic policies contribute in making external debt sustainable in Pakistan. Second, this study has gauged the potential sustainable external debt through in-sample forecast method. The estimated results obtained by the ARDL method show that Pakistan has just entered into a phase of unsustainable debt burden in the long run as fiscal reaction analysis exhibits the weak significant negative relationship between primary balance and external debt to GDP ratio. Moreover, existing macroeconomic policies also show a negative association with the primary balance that implies the ineffectiveness of policies in making external debt sustainable for Pakistan. This study suggests that an increase in foreign inflows through remittances or export earnings may improve the debt sustainability state in Pakistan.

scholarly journals Rising External Debt Burden, Increase Financial Stability Risk; the Need for Fiscal Adjustment in Nigeria

2021 ◽  
pp. 33-43
Author(s):  
Adamgbo, Suka ◽  
Kenn-Ndubuisi, Juliet Ifechi* ◽  
Toby, J. Adolphus
Keyword(s):  
Low Income ◽  
Financial Stability ◽  
External Debt ◽  
Low Income Countries ◽  
Fiscal Responsibility ◽  
Debt Sustainability ◽  
Debt Burden ◽  
Fiscal Adjustment ◽  
Analysis Technique ◽  
The Imf

The study examines the rising external debt burden, increased financial stability risk; the need for fiscal adjustment. Given that economic sustainability is the prime desire of every economy and considering the continuous accumulation of external borrowings. Our main focus is to investigate the fiscal vulnerability and debt sustainability position of the Nigerian economy. To find out whether the country’s present fiscal position is sustainable? Has the substantial external borrowings in the last two decades of uninterrupted democratic rule significantly supported the growth path of the Nigeria economy? If not, there is need for fiscal adjustment. Our period of investigation spans from 1999 to 2019. Data estimated using the time series based from CBN, Federal Ministry of Finance, IMF/World Bank publications. In analyzing the country’s debt burden/vulnerability, we applied the IMF debt burden indicators under the debt sustainability framework (DSF) for low income countries. Using the descriptive statistic, the study also employed the regression analysis technique to exploits the cause and effect relationship between the nation’s present debt stock, debt servicing obligation and the nominal as well the real economic growth rate. Our findings revealed the following; (i) using the percentile analysis and comparing it with the major debt sustainability bench marks under the IMF/Work Bank specifications, the country’s debt sustainability position was very negligible. The Nigerian situation shows debt sustainability position that fell below the bench marks (ii) the results of our finding also indicates a negative statistically significant relationship that exists between debt stock, servicing payment and both the nominal and real GDP. Based on our results, we concluded that the present fiscal vulnerability position of the country if not checked or curtailed through fiscal adjustment would amount to increasing the financial stability risk capable of causing deterioration in the functioning of the economy. We therefore, suggest amongst other measures that all should be aimed at improving and or enhancing monetary restrains, debt contraction restrains as well evolving and improving existing rules toward achieving fiscal responsibility and discipline.

scholarly journals The Debt Overhang Hypothesis: Evidence from Pakistan

2016 ◽  
Vol 11 (1) ◽  
pp. 140-151 ◽  
Author(s):  
Muhammad Imran Shah ◽  
Irfan Ullah ◽  
Zia Ur Rahman ◽  
Nadeem Jan
Keyword(s):  
Economic Growth ◽  
Dynamic Behaviour ◽  
Negative Impact ◽  
Labour Force ◽  
External Debt ◽  
Unit Roots ◽  
Debt Overhang ◽  
Debt Burden ◽  
Long Run ◽  
Domestic Labour

AbstractThis study investigates the debt overhang hypothesis for Pakistan in the period 1960-2007. The study examines empirically the dynamic behaviour of GDP, debt services, the employed labour force and investment using the time series concepts of unit roots, cointegration, error correlation and causality. Our findings suggest that debt-servicing has a negative impact on the productivity of both labour and capital, and that in turn has adversely affected economic growth. By severely constraining the ability of the country to service debt, this lends support to the debt-overhang hypothesis in Pakistan. The long run relation between debt services and economic growth implies that future increases in output will drain away in form of high debt service payments to lender country as external debt acts like a tax on output. More specifically, foreign creditors will benefit more from the rise in productivity than will domestic producers and labour. This suggests that domestic labour and capital are the ultimate losers from this heavy debt burden.

scholarly journals Social development and public debt sustainability

2021 ◽  
Vol 14 (2) ◽  
pp. 79
Author(s):  
Chara Vavoura ◽  
Ioannis Vavouras
Keyword(s):  
Fiscal Policy ◽  
Social Development ◽  
Public Debt ◽  
Debt Crisis ◽  
Necessary Condition ◽  
Debt Sustainability ◽  
Long Run ◽  
Policy Measures ◽  
Of Greece

The issue of public debt sustainability is of exceptional importance in the case of Greece. As a rule, the relevant analysis is limited to the examination of the fiscal policy measures reported to contribute to reducing public debt leaving out the investigation of the factors that caused the country’s debt crisis. The objective of the present paper is to explore the determinants of Greece’s debt crisis and the strategy required to address it. Our work highlights the issue of social development, which is found to be a necessary condition for ensuring the long run sustainability of the country’s public debt.

scholarly journals The Effect of Nonmonetary Factors on Inflation Dynamics in Russia in the Period of 2000–2018

2020 ◽  
Vol 20 (4) ◽  
pp. 99-112
Author(s):  
Victoria E. Nekrestova ◽  
Irina A. Somova
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Central Bank ◽  
Economic Sanctions ◽  
Price Inflation ◽  
Inflation Dynamics ◽  
Distinctive Features ◽  
Agricultural Prices ◽  
Consumer Prices

The paper reviews the effect of nonmonetary factors on inflation dynamics in Russia from 2000 to 2018. The period under review was divided into two intervals with different economic dynamics: 2000–2008 – the period of economic growth in Russia, 2009–2018 – the period of a slower rate of economic growth. Both periods were analyzed for various nonmonetary factors having an impact on inflation, which helped reveal common as well as distinctive features of nonmonetary factors. Some factors, such as the growth rate of agricultural prices had a significant impact on the consumer price inflation dynamics over the whole period under research. Other nonmonetary factors ceased to have an effect on consumer prices making room for others. Thus, the volume of imports turned out to be significant only in the period from 2009 to 2018, which is explained by the geopolitical situation and introduced economic sanctions. The conducted research confirmed a growing role of nonmonetary factors in the inflation processes. This conclusion requires consideration of specific features of nonmonetary causes of inflation on behalf of the Central bank and the fiscal organs in development of concrete steps to reduce inflation. The priority should continue to be given to effective tariff regulation, modernization of industry and promotion of competition.

scholarly journals Análisis de la integración y dependencia de las políticas monetarias de la Unión Europea

2013 ◽  
pp. 47
Author(s):  
María del Carmen González Velasco ◽  
Roque Brinckmann
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Empirical Evidence ◽  
European Central Bank ◽  
Central Banks ◽  
Uncovered Interest Parity ◽  
European Central ◽  
Long Run ◽  
Bank Of England ◽  
Interest Parity

En este artículo se efectúa un análisis de la integración y dependencia de las políticas monetarias de la Unión Europea y, en concreto, de las políticas monetarias de la Unión Económica yMonetaria y de la zona no euro para el periodo comprendido entre Enero de 1999 y Septiembre 2009. Se aplica la metodología de la cointegración de Engle y Granger (1987) y de Johansen(1988) para contrastar la hipótesis de la paridad de tipos de interés no cubierta y se llega a la conclusión de que ambas políticas están cointegradas porque mantienen una relación de equilibrio a largo plazo. También se deduce una dependencia de la política del Banco de Inglaterra de la política del Banco Central Europeo, lo que confirma la importancia y el liderazgo de la Unión Económica y Monetaria.<br /><br />This study is to investigate the long-run relationship and dependence between the UME´s monetary policy and non-euro zone´s monetary policy for the period from January 4, 1999 to September 30, 2009. We use cointegration methodology to test the Uncovered Interest Parity Hypothesis and the results indicate a long-run cointegration and empirical evidence testifies a leader-follower pattern between the two central banks. According to this pattern, the Bank of England does follow the European Central Bank.

Anatomy of a “Holding Operation”

2019 ◽  
pp. 235-250
Author(s):  
Jerome Roos
Keyword(s):  
Central Bank ◽  
European Central Bank ◽  
Banking Crisis ◽  
Sovereign Default ◽  
High Concentration ◽  
European Central ◽  
The Core ◽  
The Imf

By April 2010, Greece was teetering on the brink of bankruptcy. The largest sovereign default in history now loomed as early as May 19, when a massive €8.9 billion bond payment was due. Since Greece's principal lenders were a handful of systemically important French and German banks, each “dangerously overexposed to peripheral countries,” the prospect of a Greek payment suspension and subsequent contagion across the periphery unleashing a crippling continental banking crisis looked particularly unattractive to the French and German governments. This chapter shows how the high concentration of Greece's debt among a number of big banks in the core countries eventually moved the creditor states and the European Central Bank to join forces with the IMF and intervene aggressively on foreign bondholders' behalf, disbursing a series of record-breaking international bailout loans under strict policy conditionality to keep Greece solvent and servicing its external debts.

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