Recent Private Capital Inflows to Developing Countries: Is the Debt Crisis History?

Michael P. Dooley, Eduardo Fernandez-Arias, Kenneth M. Kletzer

NBER Working Paper No. 4792
Issued in July 1994
NBER Program(s):   IFM

This empirical study finds that while debt reduction and policy reforms in debtor countries have been important determinants of renewed access to international capital markets, changes in international interest rates have been the dominant factor. We calculate the effects of changes in international interest rates for a 'typical' debtor country. We conclude that increases in interest rates associated with business cycle upturn in industrial countries could depress the secondary market prices of existing debt to levels inconsistent with continued capital inflows.

(356 K)

Published: Dooley, Michael & Fernandez-Arias, Eduardo & Kletzer, Kenneth, 1996. "Is the Debt Crisis History? Recent Private Capital Inflows to Developing Countries," World Bank Economic Review, Oxford University Press, vol. 10(1), pages 27-50, January.

This paper is available as PDF (356 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX