This paper raises several cautionary notes regarding high-conditionality lending by the International Monetary Fund and the World Bank in the context of international debt crisis. It is argued that the role for high-conditionality lending is more restricted than generally believed, because...

This paper reviews the management of the debt crisis to date, and considers several possible alternative approaches for international cooperation in the future. The first part of the paper briefly reviews the scope of the crisis, and some of the reasons for its onset. Then, the paper describe...

We analyze the pattern of growth of a nation which borrows abroad and which has the option of repudiating its foreign debt. We show that the equilibrium strategy of competitive lenders is to make the growth of the foreign debt contingent on the growth of the borrowing country. We give a...

The major theme of this paper is that the commercial banks have weathered the debt crisis, while many debtor countries remain in economic paralysis or worse. There is a growing consensus that much of the LDC debt will not be fully serviced in the future, and that consensus is reflected in at...

With the rapid increase in LDC indebtedness in the recent decade, the issues of creditworthiness and country risk have gained new importance. This paper offers a theoretical and historical analysis of international capital markets in the presence of default risk. The theoretical model suggests...

This paper develops a cross-country statistical model of debt rescheduling, and the secondary market valuation of LDC debt, which links these variables to key structural characteristics of developing countries, such as the trade regime, the degree of income inequality, and the share of...

The effect on commercial banks of exposure to large amounts of developing country debt has been a topic of increasing concern in recent years. Fear of default on the part of the debtor countries has led to fears for the solvency of the creditor banks since in many cases the total of outstanding...

By any standard, Bolivia's economic crisis in the 1980's has been extraordinary. Like its neighbors. Bolivia suffered from major external shocks, but the extent of economic collapse in the face of these shocks (including a hyperinflation during 1984-85) suggests that internal factors as well as...

In this paper we explore in detail the various ways by which the introduction of intermediate imports affects the comparative statics and the dynamics of adjustment in an open economy. The importance of integrating the role of intermediate imports into a theory of macro-economic adjustment...