External Factors in Debt Sustainability Analysis: An Application to Latin America
Journal Title: Journal of Banking and Financial Economics - Year 2016, Vol 1, Issue 5
Abstract
This paper develops a framework for debt sustainability analysis that integrates econometric estimates of the effect of global factors on a set of key domestic variables that determines public and external debt dynamics. The methodology is applied to assess debt sustainability in Latin America – a region highly sensitive to external conditions. Results suggest that, while some countries in the region are well placed to withstand moderate or even large foreign shocks, many would benefi t from strengthening their fi scal positions to be able to deploy countercyclical policies under adverse scenarios, especially tail events. External sustainability, on the other hand, does not appear to be a source of concern for most countries.
Authors and Affiliations
Gustavo Adler, Sebastian Sosa
Keywords
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- EP ID EP347996
- DOI 10.7172/2353-6845.jbfe.2016.1.4
- Views 79
- Downloads 0
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