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Financing Economic Development: The Role of External Debt in Emerging Economies
May 18, 2017 @ 1:00 pm - 2:00 pm
City Tech’s Dr. Unurjargal Nyambuu, Assistant Professor of Economics, will present her talk titled “Financing Economic Development: The Role of External Debt in Emerging Economies” as part of the Department of Social Science Colloquium on May 18, from 1-2 p.m. in Namm 601A. Light refreshments will be served.
Dr. Nyambuu’s research assesses different external financing sources for economic development, highlighting the sustainability of external debt. A lack of external debt, for certain developing countries, may not allow for the development of needed infrastructure. On the other hand, over-dependence on external debt for both public and private debts may lead to a debt crisis.
Dr. Nyambuu shows that for resource-rich countries that used their resources as collateral and have borrowed large sums, default risk increased, sometimes leading to a debt crisis. The obvious implication is that the default probability, and therefore the yield, on sovereign issues will rise—increasing borrowing costs as a result. Her research shows that external debt might be used as a warning signal in certain situations.