Debt Build-up in Frontier Low-Income Developing Countries (LIDCs) since 2012: Global or Country-specific Factors and Way Forward?

Soyres, Constance de; Picco, Anna Rogantini

doi:10.5089/9781484396247.001

Cited by 5 publications

(4 citation statements)

References 13 publications

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“…Policymakers and practitioners have raised concerns about rising debt levels in emerging and low-income countries since the 2008-09 global financial crisis (Essl et al, 2017;Nishio and Bredenkamp, 2018;Soyres et al, 2019). Cyclical factors such as negative commodity price shocks and loose fiscal policies are typically identified as the main culprits of large surges in government debt.…”

Section: Discussionmentioning

confidence: 99%

The 'Fiscal Presource Curse': Giant Discoveries and Debt Sustainability

Sobrinho¹,

Ruzzante²

2022

IMF Working Papers

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Section: Discussionmentioning

confidence: 99%

The 'Fiscal Presource Curse': Giant Discoveries and Debt Sustainability

Sobrinho¹,

Ruzzante²

2022

IMF Working Papers

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“…Babu et al (2014), Clements et al, (2003) and Malik et al, (2010) found negative relationship between economic growth and ET ratio. Soyres et al (2019), Kharusi and Ada (2018) and Çiftçioğlu and Sokhanvar (2018) found positive relationships between economic growth and ET ratio in the literature. Zaghdoudi (2018) examined the relationship examined the relationship between human development index and ET for a panel of 95 developing countries for the period 2002 and 2015.…”

Section: Introductionmentioning

confidence: 94%

The Effect of External Debt on Life Expectancy Through Foreign Direct Investment: Evidence From Turkey

Beşe

Friday²

2021

IJEFI

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This is the first study in the single country studies that analyze the relationship between life expectancy, short-term external debt, and longterm external debt for Turkey for the period from 1974 to 2017. This study analyzed the direct effect of long-term debt and short-term debt on life expectancy in Turkey. General tendency in the literature is to analyze the relationship between growth and life expectancy. According to the results in this study, long run relationship is confirmed between the variables. The causal relationship is found from life expectancy to long-term debt and short-term debt but no causal relationship is found from long-term debt and short-term debt to life expectancy. The reason behind this result may result from that Turkey's increasing life expectancy leads to population increase and the increase in population leads to the increase in the construction of new buildings. For the last 20 years, Turkey started to renew its construction infrastructure and at the same time establishing new buildings for its increasing population. Resulting from that, Turkey needed funding to fund its investments, and it currently is, and there has been a gap between investments and savings in Turkey. Turkey may have used external debt to fund the gap between investments and savings. This article recommends further analysis for the direct relationship between external debt and life expectancy for developing countries.

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“…Only a few studies empirically assess the characteristics and drivers of capital flows to FMEs (de Soyares et al 2019;Silva et al 2021). Silva et al (2021: 10) stress that the increase in bond issuance by EMEs after the GFC coincided with a decreasing trend in global financial market volatility, suggesting that during calm periods in global financial markets, foreign investors have a higher appetite for risk and, consequently, are more willing to invest in higher yield, but also speculative grade and higher risk securities, such as FMEs' bonds.…”

Section: The Dynamics Of Financial Globalisation and The Emergence Of...mentioning

confidence: 99%

Frontier-market economies as a new group of the financial periphery: patterns and transmission channels of global shocks

Prates,

Fritz,

Paula

2023

European Journal of Economics and Economic Policies Intervention

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This paper seeks to fill a gap in the literature on frontier market economies (FMEs) with the following two research questions: (i) Which are the drivers of FMEs’ integration into financial globalisation? (ii) What explains the greater vulnerability of FMEs compared to emerging market economies (EMEs) to global financial shocks? We argue that the emergence of FMEs as a new group of the financial periphery fills a vacuum left for global investors by the major EMEs, whose spreads declined in the past decade due to high foreign currency reserve accumulation and other EME-related factors. To answer the second question, we introduce the concept of financial hierarchy as a second layer of the currency hierarchy: while the currency hierarchy is organized by the different degrees of liquidity premia currencies offer, in the financial hierarchy, not currencies, but financial assets are placed according to the nominal yield. While FMEs’ currencies have a lower liquidity premium than those of EMEs, the difference between them is not vast – as both are not accepted at the international level – and are insufficient to explain FMEs’ greater vulnerability to external financial shocks. We argue in the paper that this vulnerability stems mainly from the position of FMEs’ at the bottom of the financial hierarchy, which results in a different pattern of international financial integration.

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Debt Build-up in Frontier Low-Income Developing Countries (LIDCs) since 2012: Global or Country-specific Factors and Way Forward?

Cited by 5 publications

References 13 publications

The 'Fiscal Presource Curse': Giant Discoveries and Debt Sustainability

The 'Fiscal Presource Curse': Giant Discoveries and Debt Sustainability

The Effect of External Debt on Life Expectancy Through Foreign Direct Investment: Evidence From Turkey

Frontier-market economies as a new group of the financial periphery: patterns and transmission channels of global shocks

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