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Investment incentives : new money, debt relief, and the critical role of conditionality in the debt crisis (الإنجليزية)

External debt depresses investment and lowers economic growth below its potential through its negative effect on liquidity and expected profitability. These effects can pull a country into a downward spiral in which both the debtor country and creditors lose. This article considers the possibilities for revising contracts between a debtor and its creditors once a debt crisis has erupted. The authors develop a framework that shows how various combinations...
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