02057cas a2200241 a 4500 AALejournalIMF011006 230101c9999 xx r poo 0 0eng d 15.00 USD 9781589069114 1020-7635 BD-DhAAL BD-DhAAL International Monetary Fund. Research Dept. IMF Staff Papers, Volume 57, No. 1. Washington, D.C. : International Monetary Fund, 2010. 1 online resource (287 pages) IMF Staff 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 countries suffer from a debt overhang? Can debt relief foster their growth rates? To answer these important questions, this article looks at how the debt-growth relation varies with indebtedness levels, as well as with the quality of policies and institutions, in a panel of developing countries. The main findings are that, in countries with good policies and institutions, there is evidence of debt overhang when the net present value of debt rises above 20-25 percent of GDP; however, debt becomes irrelevant above 70-80 percent. In countries with bad policies and institutions, thresholds appear to be lower, but the evidence of debt overhang is weaker and we cannot rule out that debt is always irrelevant. Indeed, in such countries, as well as in countries with high indebtedness levels, investment does not depend on debt levels. The analysis suggests that not all countries are likely to profit from debt relief, and thus that a one-size-fits-all debt relief approach might not be the most appropriate one. Mode of access: Internet IMF Staff Papers; IMF Staff Papers ; No. 2010/001 Full text available on IMF http://elibrary.imf.org/view/journals/024/2010/001/024.2010.issue-001-en.xml IMF e-Library