NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Hiccups for HIPCs?

Craig Burnside, Domenico Fanizza

NBER Working Paper No. 10903
Issued in November 2004
NBER Program(s):   EFG   IFM

In this paper we discuss fiscal and monetary policy issues facing heavily-indebted poor countries (HIPCs) who receive debt reduction via the enhanced HIPC initiative. This debt relief program is distinguished from previous ones by its conditionality: freed resources must be used for poverty reduction. We argue that (i) this conditionality severely limits the extent to which the initiative provides significant debt relief; (ii) depending on the response of monetary policy to an increase in social spending there could be a short-run increase in inflation in HIPC countries and (iii) the keys to long-run fiscal sustainability in the HIPCs are significant fiscal reforms by their governments, and the effectiveness of their poverty reduction programs in raising growth.

download in pdf format
   (392 K)

email paper

This paper is available as PDF (392 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w10903

Published: Burnside, Craig and Domenico Fanizza. "Hiccups For HIPCs? Implications Of Debt Relief For Fiscal Sustainability And Monetary Policy," Contributions to Macroeconomics, 2005, v5(1), Article 4.

Users who downloaded this paper also downloaded these:
Arslanalp and Henry w12187 Debt Relief
Arslanalp and Henry w9369 Debt Relief: What Do the Markets Think?
Reinhart and Rogoff w15639 Growth in a Time of Debt
Sachs Conditionality, Debt Relief, and the Developing Country Debt Crisis
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us