This paper presents a pricing model for secondary market debt designed to assess the market value of various forms of guarantees and the impact of debt reduction on the value of remaining claims. The model is more flexible and realistic than other models. The technique used, option pricing,...

This paper derived closed form solutions for the pricing of options on average prices and recapture clauses. On this basis, the values of recapture clauses in the Mexico and Venezuela agreements under alternative assumptions regarding the state variable underlying the clauses are estimated. The...

Nigeria's oil boom has not brought an end to perennial stagnation in the non-oil economy. Is this the unavoidable consequence of the resource boom or have misguided policies contributed? This paper indicates that the extreme volatility of expenditure rather than Dutch Disease effects are behind...

Should countries such as Poland or the USSR move toward more flexible prices gradually or in a"big bang?"Why is it that governments committed to eventual price flexibility so often seem to be unable to let go of"temporary"controls? Why, after price increases early in a program of price controls,...

Russia entered the global crisis with strong fiscal position, low public debt, and large fiscal and monetary reserves, which helped it cushion the crisis shocks. But the rise in the non-oil fiscal deficit in 2007-08 and, more importantly, the massive impact of the global crisis in late 2008 and...

Interest rates fell sharply after Mexico's Brady deal, and private investment and growth recovered. The authors show that the main benefit of debt relief was not to lower expected payments but to reduce uncertainty. Reduced uncertainty was found to be the dominant factor in explaining the...

The authors use Mexican agriculture as a case study to analyze the transition problems that arise in most major economic reforms. They focus on the implications for policy design of the absence of efficient capital markets; on the welfare costs of reforming only gradually; on incentive problems...

The decline in private savings since 1982 is arguably the most important problem in high debt countries. A reversal of the trend is essential if growth is to be restored. Three factors predominate : 1) the extent of intertemporal substitution; 2) attitudes toward risk; and 3) private/public...

In many countries, well-meant ad hoc tax incentives proliferate over time, creating an opaque corporate tax structure and many unanticipated tax loopholes. Tax authorities in several countries have considered and sometimes introduced minimum corporate taxes. Liability under such a tax is...

Turkey's recovery from its debt crisis ( 1978 - 80 ) has made it the paragon of export led growth. The driving force behind the Turkish export miracle has remained a matter of debate. If what happened in Turkey was a spillover of its proximity to the Middle East, there is little other countries...