Debt sustainability and exchange rate stabilisation : towards a new theory

Basdevant, Olivier; De Wet, Theuns J.

dc.contributor.author	Basdevant, Olivier
dc.contributor.author	De Wet, Theuns J.
dc.date.accessioned	2009-10-28T06:18:59Z
dc.date.available	2009-10-28T06:18:59Z
dc.date.issued	2000-09
dc.description.abstract	The sustainability of debt is a crucial issue in developing and transitional economies. In this paper, it shows that a bubble in the real exchange rate could result in a sudden collapse in the sustainability of a country's debt. Furthermore, it is shown that monetary authorities may be unable to control the exchange rate, as its dynamics also depends on that of the debt. Hence, the only feasible policy measure to stabilise the real exchange rate is to increase domestic non-price competitiveness to ensure an improvement in the trade balance of the economy.	en_US
dc.identifier.citation	Basdevant, O & De Wet, T 2000, 'Debt sustainability and exchange rate stabilisation: towards a new theory', South African Journal of Economic and Management Sciences, vol. 3, no. 3, pp. 436-445. [http://www.journals.co.za/ej/ejour_ecoman.html]	en_US
dc.identifier.issn	1015-8812
dc.identifier.uri	http://hdl.handle.net/2263/11627
dc.language.iso	en	en_US
dc.publisher	Faculty of Economic and Management Sciences, University of Pretoria	en_US
dc.rights	Faculty of Economic and Management Sciences, University of Pretoria	en_US
dc.subject	Debt sustainability	en
dc.subject	Domestic non-price competitiveness	en
dc.subject	Exchange rate stabilization	en
dc.subject	Exchange rates	en
dc.subject	Monetary authorities	en
dc.subject	Trade balances	en
dc.subject.lcsh	Foreign exchange rates	en
dc.title	Debt sustainability and exchange rate stabilisation : towards a new theory	en_US
dc.type	Article	en_US