The international debt crisis is still a danger to the world economy. In this book, theory and practice are combined in one comprehensive approach to the debt problem. The theoretical issues are discussed in their conceptual, logical inter-relationship and are related to the major macroeconomic issues of indebted countries. International risk assessment models are used as a bridge between theory of international finance and risk assessment methodologies used in commercial banking. External debt optimising models and default models are analyzed within a macroeconomic framework as well as with regard to debtors' creditworthiness. The debt problem is treated in two closely related parts. In the first one, the theoretical context of debt crisis is discussed in its macroeconomic setting; in the second part the debt relief techniques, instruments and policies are discussed within the framework of the new international debt strategy, and the components of the new debt management strategy. This monograph on international economics and development economics is intended for researchers, graduate students and policy making experts.
I: An Overview of the Theoretical Aspects of Foreign Debt.- 1. Measuring External Debt.- 1.1 External Debt Reporting Systems.- 1.2 Gross External Debt and Debt Externalities.- 1.3 External Debt and Equity Finance.- 2. Macroeconomics of External Debt.- 2.1 Macroeconomic Concepts of External Debt.- 2.2 Active and Passive Debt Accumulation.- 2.3 Domestic Inflation and External Debt.- 2.4 External Debt and Relative Prices.- 2.5 Debt Trap and Economic Growth.- 2.6 Gains and Losses from External Borrowing.- 3. Creditworthiness and Country Risk.- 3.1 Measuring Country Risk.- 3.2 Country Risk in Commercial Banking.- 3.3 Modelling Country Risk.- 3.4 Country Risk Assessment - A Recapitulation.- 4. Economics of Default.- 4.1 Introduction and Terminology.- 4.2 Costs and Benefits of Default.- 4.3 Default in External Debt Models.- 4.4 Default and the Response of Banks.- 4.5 Legal Ramifications of Default.- 4.6 Forecasting Demand and Supply for Defaulting Country.- 4.7 Default - A Recapitulation.- 5. Optimal and Non-Optimal Debt.- 5.1 Conceptual Framework.- 5.2 Selection of Structural Variables.- 5.3 Non-Optimising and Optimising Multi-Period Models.- 5.4 Optimising Developing Country's Debt and Problem of Overborrowing.- 5.5 Optimising Debt under Perfect Capital Market.- II: Policy Responses to the International Debt Crisis.- 6. Analytical Issues in the Current External Debt Strategy.- 6.1 Introduction.- 6.2 Traditional Approach to the Debt Crisis.- 6.3 Supply-Side Versus Demand-Side of the Debt Crisis.- 6.4 External Debt - Solvency or Liquidity Issue?.- 6.5 External Debt - Fiscal or Trade Issue?.- 6.6 External Debt Rescheduling in the Eighties.- 7. Debt Relief Techniques.- 7.1 Doing Nothing Approach.- 7.2 Ad-Hoc Approach.- 7.3 Debt Forgiveness Versus Debt Reduction.- 7.4 Techniques Affecting Principal and Interest.- 8. In Search for a New Debt Strategy - Plans for Reform of International Lending and Contingency Proposals.- 8.1 Proposals Affecting Principal Payments.- 8.2 Proposals Including Additional Guarantees.- 8.3 Proposals Affecting Interest Payments.- 8.4 Contradictory Motives for a New Debt Strategy.- 9. Managing the International Debt Crisis - Components of the New Debt Strategy.- 9.1 The Need for a New Lending and Debt Reduction.- 9.2 The Need for a Better Debt Management.- 9.3 The Need for a New Institutional Framework.- 9.4 The New Debt Strategy - A Recapitulation.
Series: Studies in Contemporary Economics
Number Of Pages: 150
Publisher: Springer-Verlag Berlin and Heidelberg Gmbh & Co. Kg
Country of Publication: DE
Dimensions (cm): 24.41 x 16.99
Weight (kg): 0.27