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What determines external debt tipping points?

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  • Ouyang, Alice Y.
  • Rajan, Ramkishen S.

Abstract

This paper is interested in the nexus between external debt and export competiveness. Specifically, while we find that once external debt exceeds a certain threshold it is negatively associated with export growth, we are interested in determining whether the tipping points vary based on country characteristics. We test various hypotheses, including extent of exchange rate flexibility, size of foreign exchange reserve holdings, bond market development, degree of banking sector concentration and history of financial crises.

Suggested Citation

  • Ouyang, Alice Y. & Rajan, Ramkishen S., 2014. "What determines external debt tipping points?," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 215-225.
    • Handle: RePEc:eee:jmacro:v:39:y:2014:i:pa:p:215-225
    DOI: 10.1016/j.jmacro.2013.11.001
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    Cited by:

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    2. Jane Mpapalika & Christopher Malikane, 2019. "The Determinants of Sovereign Risk Premium in African Countries," JRFM, MDPI, vol. 12(1), pages 1-20, February.
    3. Freytag , Andreas & Pettersson, Jonatan & Schmied, Julian, 2016. "Debt Relief and Good Governance: New Evidence," VfS Annual Conference 2016 (Augsburg): Demographic Change 145914, Verein für Socialpolitik / German Economic Association.
    4. Andreas FREYTAG & Julian SCHMIED, 2019. "Debt Relief And Good Governance: New Evidence Of Developing Countries For The Period 1990-2013," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 19(1), pages 15-32.
    5. Sasidaran Gopalan, 2015. "Does Foreign Bank Entry Contribute to Financial Depth?: Examining The Role of Income Thresholds," HKUST IEMS Working Paper Series 2015-05, HKUST Institute for Emerging Market Studies, revised Feb 2015.
    6. Olga Korol & Nataliya Cherkas, 2015. "The Economic Impact Of Foreign Debt In Greece," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 1(1).
    7. Lawal Isola Adedoyin & Bibire Mabel Babalola & Adegbola O. Otekunri & Lawal Isola Adedoyin, 2016. "External Debt and Economic Growth: Evidence from Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(6), pages 179-194, DECEMBER.
    8. Chuku Chuku & Alexandre Kopoin, 2022. "Working Paper 367 - Debt Distress and Recovery Episodes in Africa: Good Policy or Good Luck?," Working Paper Series 2493, African Development Bank.
    9. Ramkishen S. Rajan & Khee Giap Tan & Kong Yam Tan, 2015. "Fiscal sustainability in selected developing ASEAN economies," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 11(4/5/6), pages 186-203.

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    More about this item

    Keywords

    Exchange rate regimes; Debt threshold; External debt; Exports; Financial development; Reserves;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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