Series: IMF Working Papers
Author(s): Ephraim Chirwa , Montfort Mlachila , and Yohane Anthony Khamfula
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 April 2006
Keywords: Donor herding behavior, domestic debt crisis, loan-pushing model, domestic-debt repayment gap, fiscal expenditure, debt crisis, domestic debt, domestic financial market, domestic debt data, Fiscal Expediture
This paper presents a new model based on the loan-pushing model by Basu (1991) to show how a domestic debt crisis can occur in a low-income country following donor herding. The model focuses on the rational herding...