The effects on growth of the integration of an autarkic country into the world economy are analyzed, focusing on the differing roles of imitation and innovation in human capital accumulation. The country initially concentrates on imitation of foreign knowledge; subsequently, as it approaches the...

This notification summarizes the outcome of consultations with Washington-based representatives of participants in the General Arrangements to Borrow (GAB) on a possible renewal of the GAB decision. By way of background, the GAB was established in 1962 and is a standing agreement between the...

This paper analyzes the factors determining the payment on outstanding debt in the presence of partial defaults, and the feasibility of renewed investment. We show that a higher relative size of sectors with lower substitutability between domestic and foreign products will increase the resource...

This paper considers the problem of allocation of investment for a debtor country that faces a ceiling on the amount of foreign debt it can accumulate. It shows that it is optimal for the debtor country to create a more open economy by favoring investment in the export sector over investment in...

This paper formulates a simple aggregate growth model that is capable of assessing the impact of macroeconomic policies on the long-term performance of a developing country. The model emphasizes expenditures on human capital and the dynamics of external debt, and yields empirically testable...

The sensitivity of secondary sovereign loan market returns to three classes of economic news is estimated in the arbitrage pricing theory framework. Returns are characterized by a limited response to unexpected changes in procyclical U.S. aggregates. Shocks to country-specific balance of payment...

A common proposal designed to deal with the developing countries’ debt problem is that there be set up some kind of “international debt facility” which would buy up debt at a discount and then write down its contractual value, hence providing debt relief. There are three main parties to...

This note examines the efficiency gains that might result from market-based debt reduction and alternative uses of resources. It is argued that when a country’s expected output falls short of contractual claims on that output, private investment is drawn to activities that protect the...

buy–backs of external debt financed by the debtor through asset sales generally result in unchanged or lower market prices for remaining debt. The contractual value of debt is reduced by some multiple of the market value of assets sold. The use of assets as collateral for new debt that is...