Real Exchange Rates Dynamic and Debt Sustainability in Developing Countries

27 Pages Posted: 5 Feb 2005

See all articles by Babacar Sene

Babacar Sene

Universite Paris Dauphine - EURISCO

Abstract

The main objective of this paper is to study the relationship between real exchange rates dynamic and debt in developing countries. Two kinds of definition of debt sustainability are used for study the impact of external debt on real exchange rates. The main surplus of this study is to introduce "strong version" of debt sustainability for the determination of the equilibrium real exchange rates. The "strong version" of debt sustainability is obtained with the conclusions of "debt overhang" theory in developing countries.

Note: Downloadable document is in French.

Keywords: Equilibrium real exchange rates, debt overhang, weakness version, strong version, current account dynamic, external equilibrium

JEL Classification: F11, F31

Suggested Citation

Sene, Babacar, Real Exchange Rates Dynamic and Debt Sustainability in Developing Countries. Available at SSRN: https://ssrn.com/abstract=655901 or http://dx.doi.org/10.2139/ssrn.655901

Babacar Sene (Contact Author)

Universite Paris Dauphine - EURISCO ( email )

Place du Marechal de Lattre Tassigny
Paris
France

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