Resource transfer to Latin America and the Caribbean was negative throughout the eighties. Debt-forgiveness would benefit not only the debtor countries, however. Lending countries and institutions would also stand to gain.

During the pandemic, public debt in Latin America and the Caribbean rose to more than 70 percent of GDP, and countries are now attempting to lower debt ratios. We analyze past debt reduction episodes and find inflation and the real interest rate were the most frequent main drivers, while higher...