LDC Debt in the 1980s: Risk and Reforms / Jeffrey Sachs.

Format:

Book

Author/Creator:

Sachs, Jeffrey.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0861.

NBER working paper series no. w0861

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

LDC Debt in the 1980s

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1982.

Summary:

With the rapid increase in LDC indebtedness in the recent decade, the issues of creditworthiness and country risk have gained new importance. This paper offers a theoretical and historical analysis of international capital markets in the presence of default risk. The theoretical model suggests the possibility of a prisoners' dilemma in the loan market, in which a country's dominant noncooperative strategy is to default, though a welfare-improving cooperative strategy is available. The historical analysis suggests that the IMF may play a key role in guiding creditors and debtor nations to reach cooperative solutions.

Notes:

Print version record

February 1982.