A Risk-Based Debt Sustainability Framework : Incorporating Balance Sheets and Uncertainty /

This paper proposes a new framework for the analysis of public sector debt sustainability. The framework uses concepts and methods from modern practice of contingent claims to develop a quantitative risk-based model of sovereign credit risk. The motivation in developing this framework is to provide...

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Bibliographic Details
Main Author: Gray, Dale
Other Authors: Lim, Cheng, Loukoianova, Elena, Malone, Samuel
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2008.
Series:IMF Working Papers; Working Paper ; No. 2008/040
Online Access:Full text available on IMF
Description
Summary:This paper proposes a new framework for the analysis of public sector debt sustainability. The framework uses concepts and methods from modern practice of contingent claims to develop a quantitative risk-based model of sovereign credit risk. The motivation in developing this framework is to provide a clear and workable complement to traditional debt sustainability analysis which-although it has many useful applications-suffers from the inability to measure risk exposures, default probabilities and credit spreads. Importantly, this new framework can be adapted for policy analysis, including debt and reserve management.
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Physical Description:1 online resource (25 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students