|
EconStor >
United Nations University (UNU) >
World Institute for Development Economics Research (UNU-WIDER), United Nations University >
WIDER Discussion Papers, United Nations University (UNU) >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/53006
|
| | |
| Title: | | Sovereign debt and uncertainty in the Mozambican economy  |
| Authors: | | Gode, Constantino J. |
| Issue Date: | | 2001 |
| Series/Report no.: | | WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2001/130 |
| Abstract: | | This paper studies the impact of uncertainty and debt crisis on the dynamics of the Mozambican economy over the last two decades. Investment boom and accelerated growth did not take place until peace and economic reforms were assured, helped by the role of the Paris Club creditors as senior lenders, which averted the adverse impact of a debt overhang. Innovations to private consumption and to income are positively and strongly correlated. Current account has shown persistent deterioration while private consumption is not strongly correlated with uncertainty. These facts suggest that neither the permanent-income and life-cycle theories, nor the precautionary-saving and liquidity-constraint hypotheses can fully explain macroeconomic dynamics displayed by data. In light of this evidence, a simple dynamic model with stochastic income is presented. The model predicts that at low levels of wealth, uncertainty becomes unimportant in consumption decisions; and that when consumption is close to survival requirements, uncertainty drives the economy to wealth depletion. |
| Subjects: | | sovereign debt capital accumulation uncertainty Mozambique |
| JEL: | | F34 O19 O55 |
| ISBN: | | 9291900834 |
| Document Type: | | Working Paper |
| Appears in Collections: | | WIDER Discussion Papers, United Nations University (UNU)
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/53006
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|