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- W3125304428 abstract "Debt relief provides low-income countries with an incentive to accumulate debt, boost consumption, and reduce investment over time. We quantify this incentive effect employing a dynamic stochastic general equilibrium model, calibrated to 1982–2006 Ugandan data, and find that long-run debt and consumption-to-GDP ratios are about twice as high with debt relief than without it, while the investment-to-GDP ratio is sixty percent lower. Our simulations show that debt-relief episodes are likely to have only a temporary impact on debt levels but may have a lasting effect over the size of the economy, lowering GDP growth up to twenty percent over time. These results fill a gap in the debt relief literature since, to the best of our knowledge, the quantification of incentive effects is rather scarce. The paper further contributes to the literature by constructing a tractable structural model that is able to replicate the data well and captures key features of low-income countries facing the possibility of debt relief." @default.
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- W3125304428 date "2015-06-01" @default.
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- W3125304428 title "The dynamic implications of debt relief for low-income countries" @default.
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- W3125304428 doi "https://doi.org/10.1016/j.rdf.2014.07.003" @default.
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