TY  - JOUR
AU  - Arslanalp,Serkan
AU  - Henry,Peter Blair
TI  - Debt Relief: What Do the Markets Think?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9369
PY  - 2002
Y2  - December 2002
UR  - http://www.nber.org/papers/w9369
L1  - http://www.nber.org/papers/w9369.pdf
N1  - Author contact info:
Serkan Arslanalp

Peter Blair Henry
Stern School of Business
New York University
44 West 4th Street, 11-58
New York, NY 10012
Tel: 212/998-0909
E-Mail: pbhenry@stern.nyu.edu
AB  - The stock market appreciates by an average of 60 percent in real dollar terms when countries announce debt relief agreements under the Brady Plan. In contrast, there is no significant increase in market value for a control group of countries that do not sign agreements. The results persist after controlling for IMF agreements, trade liberalizations, capital account liberalizations, and privatization programs. The stock market revaluations forecast higher future net resource transfers and GDP growth. While markets respond favorably to debt relief in the Brady countries, there is no evidence to suggest that current debt relief efforts for the Highly-Indebted Poor Countries (HIPCs) will achieve similar results.
ER  -