In this paper we consider the implications of relative consumption externalities in the Blanchard-Yaari overlapping generations framework. Unlike most of the macroeconomic literature that studies this question, the differences between agents, and, thus, in their relative position, persist in...

Macroeconomic performance in many developing countries is influenced by international credit conditions. This paper considers a developing economy that faces an upward-sloping supply function of debt. It analyzes how a particular foreign shock, a world interest shock, influences such key...