02068cas a2200265 a 4500 AALejournalIMF003898 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451862423 1018-5941 BD-DhAAL BD-DhAAL Cordella, Tito. Debt Overhang or Debt Irrelevance? : Revisiting the Debt-Growth Link / Tito Cordella, Luca Ricci, Marta Ruiz-Arranz. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (55 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Do Highly Indebted Poor Countries (HIPCs) suffer from a debt overhang? Is debt relief going to improve their growth rates? To answer these important questions, we look at how the debt-growth relationship varies with indebtedness levels and other country characteristics in a panel of developing countries. Our findings suggest that there is a negative marginal relationship between debt and growth at intermediate levels of debt, but not at very low debt levels, below the 'debt overhang' threshold, or at very high levels, above the 'debt irrelevance' threshold. Countries with good policies and institutions face overhang when debt rises above 15-30 percent of GDP, but the marginal effect of debt on growth becomes irrelevant above 70-80 percent. In countries with bad policies and institutions, overhang and irrelevance thresholds seem to be lower, but we cannot rule out the possibility that debt does not matter at all. Mode of access: Internet Ricci, Luca. Ruiz-Arranz, Marta. IMF Working Papers; Working Paper ; No. 2005/223 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/223/001.2005.issue-223-en.xml IMF e-Library