01911cas a2200253 a 4500 AALejournalIMF013521 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484382769 1018-5941 BD-DhAAL BD-DhAAL Belhocine, Nazim. The Impact of Debt Sustainability and the Level of Debt on Emerging Markets Spreads / Nazim Belhocine, Salvatore Dell'Erba. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (31 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 How do financial markets respond to concerns over debt sustainability and the level of public debt in emerging markets? We introduce a measure of debt sustainability - the difference between the debt stabilizing primary balance and the primary balance-in an otherwise standard spread regression model applied to a panel of 26 emerging market economies. We find that debt sustainability is an important determinant of spreads. In addition, using a panel smooth transition regression model, we find that the sensitivity of spreads to debt sustainability doubles as public debt increases above 45 percent of GDP. These results suggest that market interest rates react more to debt sustainability concerns in a country with a high level of debt compared to a country with a low level of debt. Mode of access: Internet Dell'Erba, Salvatore. IMF Working Papers; Working Paper ; No. 2013/093 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/093/001.2013.issue-093-en.xml IMF e-Library