This paper examines the impact of local tax rates and capital market conditions on the level and composition of borrowing by foreign affiliates of American multinational corporations. The evidence indicates that 10 percent higher local tax rates are associated with 2.8 percent higher debt/asset ratios of American-owned affiliates, and that borrowing from related parties is particularly sensitiv...

he improvements in development in Latin America and the Caribbean observed from the 1950s through the early 1970s have started to decline. Principal factors include growing external debt, the world trade imbalance due to the increase in the price of oil and manufactured products and the decrease of primary products. This deterioration of socioeconomic conditions has increasingly and primarily a...

Global HIV control funding falls short of need. To maximize health outcomes, it is critical that national governments sustain reasonable commitments, and that international donor assistance be distributed according to country needs and funding gaps. We develop a country classification framework in terms of actual versus expected national domestic funding, considering resource needs and donor fi...

We study a dynamic stochastic general equilibrium model that features heterogeneous agents, incomplete risk sharing, and collateralized debts. Facing uninsurable income risks, households have a precautionary motive for saving and, at the aggregate level, they appear more patient than the entrepreneurs. The relative patience of the households depresses the average loan rate so that the entrepren...

What determines the sustainability of sovereign debt? In this paper, we develop a model where myopic governments seek electoral popularity but can nevertheless commit credibly to service external debt. They do not default when they are poor even though default costs are low because they would lose access to debt markets and be forced to reduce spending; they do not default when they become rich...

This paper analyses whether sovereign default episodes can be seen as contingencies of optimal international lending contracts. The model considers a small open economy with capital accumulation and without commitment to repay debt. Taking first order approximations of Bellman equations, I derive analytical expressions for the equilibrium level of debt and the optimal debt contract. In this env...

Countries need short, medium, and long-term investment plans for production growth and development. Different sources for these investments can be supplied through retained profit, stock issuance, and bank loans, or a combination them. Institutions and firms need huge amount of capitals for their survival, production, and also development of activities. In addition, these institutions and firms...

Remittance inflows represent one of the most significant sources of foreign funding for most developing countries. These funds have also proven to be one of the most stable sources of external financing for developing countries during the past few decades and in the period of the last global crisis. They are much less responsive to economic cycles and economic shocks than foreign direct investm...