01794cas a2200265 a 4500 AALejournalIMF004127 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451863697 1018-5941 BD-DhAAL BD-DhAAL Chirwa, Ephraim. Donor Herding and Domestic Debt Crisis / Ephraim Chirwa, Montfort Mlachila, Yohane Anthony Khamfula. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (10 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 This paper presents a new model based on the loan-pushing model by Basu (1991) to show how a domestic debt crisis can occur in a low-income country following donor herding. The model focuses on the rational herding behavior of donors due to payoff and information externalities. Although there are many theoretical models on herding behavior, these models have not formally considered the relationship between donor herding and domestic debt crisis in a low-income country. This paper is an attempt to fill this gap. The paper shows that due to donor herding behavior a domestic debt crisis can occur once the actual debt level is above the desirable one. Mode of access: Internet Khamfula, Yohane Anthony. Mlachila, Montfort. IMF Working Papers; Working Paper ; No. 2006/109 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/109/001.2006.issue-109-en.xml IMF e-Library