TY  - JOUR
AU  - Edwards,Sebastian
TI  - Debt Relief and Fiscal Sustainability
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8939
PY  - 2002
Y2  - May 2002
UR  - http://www.nber.org/papers/w8939
L1  - http://www.nber.org/papers/w8939.pdf
N1  - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Business
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu
AB  - In this paper I analyze the relationship between fiscal policy, aggregate public sector debt sustainability, and debt relief.  I develop a methodology to compute the fiscal policy path that is compatible with aggregate debt sustainability in the post-HIPC era.  The model explicitly considers the role of domestic debt, and quantifies the extent to which future debt sustainability depends on the availability of concessional loans at subsidized interest rates.  The working of the model is illustrated for the case of Nicaragua, a country that in 2002 had one of the highest net present value of public external debt to GDP ratios.
ER  -