TY  - JOUR
AU  - Dooley,Michael P.
TI  - A Retrospective on the Debt Crisis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4963
PY  - 1995
Y2  - July 1995
UR  - http://www.nber.org/papers/w4963
L1  - http://www.nber.org/papers/w4963.pdf
N1  - Author contact info:
Michael P. Dooley
Department of Economics
Engineering II
University of California, Santa Cruz
Santa Cruz, CA 95064
Tel: 831/459 3662
Fax: 831/459-5077
E-Mail: MPD@UCSC.EDU
AB  - In this paper I argue that the international debt crisis of 1982 can best be understood as a prolonged negotiation between commercial banks and their own governments over who would bear the economic losses generated by loans made to developing countries.  This interpretation of the debt crisis is contrasted with the more familiar approach that emphasizes conflict between debtor countries and their creditors. The main conclusion is that the failure of governments of industrial countries to resolve this conflict with their banks transformed an unremarkable financial crisis into a decade-long economic crisis for debtor countries.  The analysis also suggests that recent capital inflows to developing countries are less likely to generate the same economic costs for debtor countries even if changes in the economic environment generate similar losses for investors.
ER  -