Working Papers
Debt Accumulation and Default in Low-Income Countries - Job Market Paper -
This paper explores the accumulation path of the external public debt of low-income countries (LICs) following debt relief programs. Using the relaxation of IMF debt limits for LICs that received debt relief in the early 2000s, I document that even though LICs initially lowered external debt during debt relief programs, many experienced a fast resurgence in their indebtedness and increased default risk once borrowing limits were lifted. Using a difference-in-differences model, I show that countries that benefited from the relaxation seem more likely to experience a significant increase in their debt-to-GDP ratio. I then evaluate these debt limits policies using a quantitative model of sovereign default that allows for self-fulfilling debt crises. The model includes two types of debt - subsidized loans from multilateral institutions and non-subsidized loans from the private market and an impatient government. After debt limits are lifted, my model predicts that the lower the government discount’s factor is compared to the international lenders, the more likely the country is to enter the crisis zone and be in debt distress. I find that having an impatient government from the perspective of a more patient household leads to a decrease in welfare by 0.9%.
Works in Progress
Exchange Rate Regimes and Firms Performance: Evidence from West African Countries
This paper analyzes differences in total annual sales between CFA and non-CFA firms to study the impact of different exchange rate regimes and the financial crisis of 2008, on the economic performance of West African firms. I construct cross-country firm-level panel datasets from the World Bank Enterprise Surveys and use a difference-in-differences model. I find that there is a positive effect of CFA membership on sales. However the effect of the peg on economic performance is difficult to assess. The next step is to expand the analysis by adding more countries and macroeconomic and policy variables.
A Study of Growth, Structural Change and Total Factor Productivity in African Countries - with Tade Okediji and Rodney Smith
This paper looks at the sectoral productivity growth of Sub-Saharan African (SSA) countries using the growth accounting methodology. The preliminary results show that post-2000 growth in aggregate and per capita GDP of each country exceed the world average, however poverty levels still increased. The results also suggest that TFP growth levels in agriculture, manufacturing and services are all correlated with the decrease in the share of rural residents living in poverty.