IMF paper examines impact of debt restructurings on growth
Growth generally declines, but it can increase if country exits default, authors say
Growth generally declines following a debt-restructuring operation, but if it allows a country to exit default, it can lead to "significant improvements in performance", a working paper published by the International Monetary Fund finds.
Sovereign Debt Restructuring and Growth, by Lorenzo Forni, Geremia Palomba, Joana Pereira and Christine Richmond, studies the effect of restructurings with external private creditors on growth between 1970 and 2010.
The authors find there is bad and good – or at
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