TY  - BOOK
AU  - Arslanalp,Serkan
AU  - Henry,Peter Blair
ED  - National Bureau of Economic Research.
TI  - Is Debt Relief Efficient?
T2  - NBER working paper series
PY  - 2004///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - January 2004; Hardcopy version available to institutional subscribers
N2  - When Less Developed Countries (LDCs) announce debt relief agreements under the Brady Plan, their stock markets appreciate by an average of 60 percent in real dollar terms   a $42 billion increase in shareholder value. In contrast, there is no significant stock market increase for a control group of LDCs that do not sign Brady agreements. The results persist after controlling for IMF programs, trade liberalizations, capital account liberalizations, and privatization programs. The stock market appreciations successfully forecast higher future net resource transfers, investment and growth. Creditors also benefit from the Brady Plan. Controlling for other factors, stock prices of US commercial banks with significant LDC loan exposure rise by 35 percent   a $13 billion increase in shareholder value. The results suggest that debt relief can generate large efficiency gains when the borrower suffers from debt overhang
UR  - https://www.nber.org/papers/w10217
UR  - http://dx.doi.org/10.3386/w10217
ER  -