NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Debt and Conditionality under Endogenous Terms of Trade Adjustment

Joshua Aizenman, Eduardo R. Borensztein

NBER Working Paper No. 2582 (Also Reprint No. r1151)
Issued in May 1988
NBER Program(s):   ITI   IFM

The purpose of this study is to identify conditions under which renewed international. lending will benefit both the developed and the developing countries. Our analysis will evaluate how the presence of terms of trade adjust-rent and distorted credit markets affect the conditions for the existence of beneficial lending. We demonstrate that in the presence of endogenous terms of trade adjustment, there are cases in which a competitive international banking system may not revitalize lending for investment purposes, even if such renewed lending is socially desirable, Renewed lending may require the appropriate conditionality, and the presence of endogenous terms of trade adjustment puts greater weight on investment conditionality.

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Document Object Identifier (DOI): 10.3386/w2582

Published:

  • Aizenman, Joshua A. and Eduardo R. Borensztein, "Debt and Conditionality under Endogenous Terms of Trade Adjustment," from I.M.F. Staff Papers, Vol. 35, No. 4, (December 1988). ,
  • Joshua Aizenman & Eduardo R. Borensztein, 1988. "Debt and Conditionality under Endogenous Terms of Trade Adjustment," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 686-713, December.

 
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