The Resource Debt Overhang, Liquidity Constraints and Adjustment Incentives, Bert Hofman and Helmut Reisen, (electronic book)

Debt Overhang, Liquidity Constraints and Adjustment Incentives, Bert Hofman and Helmut Reisen, (electronic book)

Label
Debt Overhang, Liquidity Constraints and Adjustment Incentives
Title
Debt Overhang, Liquidity Constraints and Adjustment Incentives
Statement of responsibility
Bert Hofman and Helmut Reisen
Creator
Contributor
Subject
Language
eng
Summary
Investment in most heavily indebted countries has been weak since 1982. The widely accepted debt overhang proposition interprets the investment drop as a moral hazard problem: a heavy debt burden raises the incentive to consume, because the marginal benefit of investment would go to the creditor. This paper develops several hypotheses on optimal reactions of a credit-constrained debtor country on an increase in debt, on variations in the credit constraint, on changes in interest rates, and contrasts these with the predictions stemming from the debt overhang proposition. Empirical specifications of conventional investment functions and consumption functions (along the Permanent Income Hypothesis) lead to reject the debt overhang proposition, but find that the switch from positive to negative external transfers to the debtor countries is an important explanation for their investment drop. The major policy conclusion is that the 1989 shift in international debt management (the Brady ..
Member of
Cataloging source
FR-PaOEC
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Hofman, Bert
Government publication
international or intergovernmental publication
Literary form
non fiction
Nature of contents
dictionaries
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Reisen, Helmut
Series statement
OECD Development Centre Working Papers,
Series volume
no.32
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Development
Label
Debt Overhang, Liquidity Constraints and Adjustment Incentives, Bert Hofman and Helmut Reisen, (electronic book)
Instantiates
Publication
Antecedent source
not applicable
Control code
356147450736
Dimensions
21 x 29.7cm.
Extent
33 p.
File format
multiple file formats
Form of item
online
Specific material designation
remote
System control number
(FR-PaOEC)
Label
Debt Overhang, Liquidity Constraints and Adjustment Incentives, Bert Hofman and Helmut Reisen, (electronic book)
Publication
Antecedent source
not applicable
Control code
356147450736
Dimensions
21 x 29.7cm.
Extent
33 p.
File format
multiple file formats
Form of item
online
Specific material designation
remote
System control number
(FR-PaOEC)

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