This paper addresses two puzzles of the growth literature: the failure of standard growth equations to account for slow growth in Latin America and Africa; and the surprising failure of trade to explain growth when trade liberalization appears to play a significant role. The paper shows that: i)...

We offer a model inwhich lenders differ in wealth endowments and choose the quality of information which they use in the process of foreign lending. We trace the effects of foreign and domestic interest rates, quality of information, quality of the pool of lending opportunities, etc. on the...

This paper surveys the literature on external debt which has developed over the past decade. Initially this literature emphasized the intertemporal nature of the balance of payments, and reflected the view that balance of payments movements were an equilibrium phenomenon reflecting either...

We examine the role of non-economic partnerships in promoting international economic exchange. Since far-sighted countries are more willing to join costly international partnerships such as environmental treaties, environmental engagement tends to encourage international lending. Countries with...

A countertrade contract ties an export to an import. Usually, countertrade is seen as a form of bilateralism and reciprocity and thus as an inefficient form of international exchange. In this paper we argue that there are circumstances where the tying of two technologically unrelated trade flows...

Drawing on a newly-collected data set on bond yields, macroeconomic variables, and news of various categories for a panel of emerging markets, we provide the first comparative analysis of the determinants of sovereign bond spreads in the first era of financial globalization and bond finance...

We use a small macro model of the Indian economy to examine the cost of the adjustment required to secure national solvency. This is compared with the corresponding cost if India were to repudiate its debts and experience financial autarky as a consequence. Our empirical results suggest that a...

It is argued that debt service burden has a negative impact on investment and capital accumulation. The main reason is that the greater percentage of reserves (foreign currency) goes to meet debt service and there will be a reduction in external capital because of a decrease in creditworthiness....

This paper estimates country risk using an alternative method to commonly used country risk models by the rating agencies. The paper builds on earlier work and tries to identify empirically the important factors affecting debt service capacity of borrowing countries. In this study we assess the...

A large literature on the appropriate sequencing of financial liberalization suggests that removing capital controls prematurely may contribute to currency instability. This paper investigates whether legal restrictions on international capital flows are associated with grated currency stability.