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A BALANCE OF PAYMENTS ANALYSIS OF THE LATIN AMERICAN DEBT CRISIS
Author(s) -
Romans J. Thomas,
Warren Stanton A.
Publication year - 1990
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1990.tb00281.x
Subject(s) - debtor , economics , creditor , debt , balance of payments , debt crisis , latin americans , external debt , monetary economics , internal debt , debt to gdp ratio , interest rate , international economics , macroeconomics , political science , law
In this paper we offer a definition of a country “debt crisis” based upon the amount of new borrowing relative to the cost of servicing past debt. Policy implications for both debtor countries and their creditors are examined. An empirical application is made to Latin American countries, 1978–82. The causes of the debt problems created during this period are investigated with respect to the extent they were the result of rising interest rates vis à vis increased borrowing.