Ali Namaki - Assistant Prof., Department of Finance, Faculty of Management, University of Tehran, Tehran, Iran. Iran Finance Association, Tehran, Iran.
Mohsen Nazari - Associate Prof., Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran.
Hossein Gaeeini - MSc. of MBA, Faculty of Management, University of Tehran, Tehran, Iran.

Since the ۱۹۷۰’s developing and developed countries have experienced unprecedented public debt levels. This surge in public debt has emphasized the importance of public debt management. Since risks such as reducing economic growth, increasing inflation, and depreciation of the national currency accompany unplanned public debt accumulation, governments should be alert not to endanger economic growth with ill-considered borrowing. In this paper, we aim to analyze Iran’s external debt variations concerning major macroeconomic variables such as GDP growth as a proxy of economic growth, inflation, and sovereign oil generated incomes. The method that is applied in this research is cross wavelet transform which is a powerful mathematical approach for analyzing the financial data.     Our results show there are different patterns in small and large scales between variables and external debt as a dependent variable has different relations with endogenous and exogenous factors. In the short run, low oil prices as an exogenous variable, during the ۱۹۸۰s have shaped governments’ debt accumulation behavior but on larger scales, indigenous variables such as governments’ budget deficits have been much more dominant in shaping governments borrowing patterns. In a chronological view, US cruel sanctions and the Iran-Iraq war were major events affecting sovereign borrowing behavior.

Public Finance, Sovereign Debt, Cross wavelet transform, International Capital Flows, Developing Economy