Born Out of Necessity: A Debt Standstill for COVID-19

CEPR Policy Insight No 103

Patrick Bolton, Lee. C Buchheit, Pierre-Olivier Gourinchas, Mitu Gulati, Chang-Tai Hsieh, Ugo Panizza, Beatrice Weder di Mauro

Many low and middle income countries may face problems servicing their external debts while addressing the COVID-19 emergency. Urgent action is needed to prevent disorderly defaults and litigations. This Policy Insight describes a mechanism to implement a debt standstill which would free significant resources to cover some of the most immediate costs of the COVID-19 crisis.