Template-Type: ReDIF-Paper 1.0
Author-Name: Sakai  Ando
Author-Name-First: Sakai 
Author-Name-Last: Ando
Author-Email: sando@imf.org
Author-Workplace-Name: IMF
Author-Name: Tamon  Asonuma
Author-Name-First: Tamon 
Author-Name-Last: Asonuma
Author-Email: tasonuma@imf.org
Author-Workplace-Name: IMF
Author-Name: Prachi  Mishra
Author-Name-First: Prachi 
Author-Name-Last: Mishra
Author-Email: prachi.mishra@ashoka.edu.in
Author-Workplace-Name: Ashoka University
Author-Name: Alexendre  Sollaci
Author-Name-First: Alexendre 
Author-Name-Last: Sollaci
Author-Email: abalduinosollaci@imf.org
Author-Workplace-Name: IMF
Title: Sovereign Debt Restructuring and Reduction in Debt-to-GDP Ratio
Abstract: How do sovereign debt restructurings reduce debt-to-GDP ratios? We explore this empirically using a comprehensive dataset covering 115 countries over 1950–2021. After addressing selection bias through an Augmented Inverse Probability Weighted estimator, we show that restructurings significantly reduce debt-to-GDP ratios over 1-5 years, with the effects working primarily through debt levels. The effect is larger when restructurings are combined with fiscal consolidation. We find heterogeneity depending on the creditor type, and the type and size of debt relief. In the short run, restructurings with higher creditor coordination, face value reductions, and larger debt reliefs, reduce debt-to-GDP ratios more effectively. (JEL F34, F41, H63)
length: 51
Creation-Date: 20250513
Revision-Date: 
Publication-Status: 
File-URL:/www/wwwashokaeduin_628/public/dp/RePEc/ash/wpaper/paper145_0.pdf
File-Format: Application/pdf 
Number: 145
Handle: RePEc:ash:wpaper:145