SSRN Author: Mitali DasMitali Das SSRN Content
http://www.ssrn.com/author=1502706
http://www.ssrn.com/rss/en-usFri, 17 Nov 2017 03:48:36 GMTeditor@ssrn.com (Editor)Fri, 17 Nov 2017 03:48:36 GMTwebmaster@ssrn.com (WebMaster)SSRN RSS Generator 1.0New: A New Index of External Debt SustainabilityDebt sustainability is fundamentally a probabilistic concept: Debt is rarely sustainable with probability one. We propose an index of external debt sustainability that reflects this uncertainty. Namely we construct the index as the probability that, at the current exchange rate, net external debt is equal to or less than the present value of net exports. Constructing this index involves three steps: (1) deriving the distribution of the present value of net exports at the current exchange rate; (2) deriving the distribution of exchange rates associated with the condition that, for each realization, the present discounted value of net exports is at least equal to the value of current net debt; and (3) assessing where the current exchange rate stands in the distribution of exchange rates and thus the probability that debt is sustainable. Having shown how this can be done, we then compute the index for two countries, the United States and Chile. Our main conclusion is the large degree of ...
http://www.ssrn.com/abstract=3070980
http://www.ssrn.com/1643405.htmlThu, 16 Nov 2017 12:04:18 GMT