Does Lower Debt Buy Higher Growth? The Impact of Debt Relief Initiatives on Growth

Does Lower Debt Buy Higher Growth? The Impact of Debt Relief Initiatives on Growth
Author :
Publisher : International Monetary Fund
Total Pages : 41
Release :
ISBN-10 : 9781498302265
ISBN-13 : 1498302262
Rating : 4/5 (262 Downloads)

Book Synopsis Does Lower Debt Buy Higher Growth? The Impact of Debt Relief Initiatives on Growth by : Ms.Sandra Marcelino

Download or read book Does Lower Debt Buy Higher Growth? The Impact of Debt Relief Initiatives on Growth written by Ms.Sandra Marcelino and published by International Monetary Fund. This book was released on 2014-12-18 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 1996, the IMF and the World Bank introduced the Heavily Indebted Poor Countries Initiative—a comprehensive debt relief program aimed at reducing the external debt burden of eligible countries to sustainable levels, provided they carry out strong programs of macroeconomic adjustment and structural reforms designed to promote growth and reduce poverty. Now that the HIPC Initiative is nearly completed, this paper investigates whether the initiative managed to spur growth, either directly or indirectly through investment. In contrast to earlier studies, we conclude that there is some evidence of positive effects of the HIPC Initiative on growth. Such evidence suggests that the HIPC Initiative and MDRI have helped HIPC-eligible countries to reach higher growth, but it remains unclear whether this is through higher investment or another channel. Also, the analysis illustrates that it is hard to disentangle pure debt-relief effects from other concurrent factors.

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