Department of Economics
Cambridge, MA 02138
Institutional Affiliation: Harvard University
NBER Working Papers and Publications
|1985||Panel Discussion: The Prospects for International Economic Policy Coordination|
with William H. Branson, Michael Emerson, Louka T. Katseli, Stephen Marris
in International Economic Policy Coordination, Willem H. Buiter and Richard C. Marston, editors
|August 1984||Borrowing Abroad: The Debtor's Perspective|
with Jeffrey Sachs: w1427
This paper addresses the question of external borrowing from the perspective of the borrowing country. The first section sketches a formal framework for optimal borrowing by a developing country, as seen from the planner's point of view. The next three sections use this framework for the development of three important limits on external borrowing: the problem of solvency, the problem of liquidity and the problem created by the possibility of repudiation. The fifth section relates external borrowing to macroeconomic management of the borrowing country, and the sixth section pulls together the many factors that suggest that external debt of a country should be subject to central management or at least surveillance. Following that, we offer some guidelines for limits to the magnitude of exter...
Published: Cooper, Richard N. and Jeffrey D. Sachs. "Borrowing Abroad: The Debtor's Perspective." International Debt and Developing Countries, edited by Gordon W. Smith and John T. Cuddington. Washington: World Bank Symposium, (March 1985), Washington: D.C.