Buybacks of LDC Debt and the Scope for Forgiveness
This paper explains why a debtor country may be eager to spend foreign exchange reserves on the retirement of its cross-border obligations at market prices. A simple two-period framework shows that such spending can be profitable to both the debtor countries and their foreign creditors, and thereby provides an explanation as to why the so-called buybacks of LDC debt actually take place. An extended version of the basic framework shows how buybacks can be induced by having commercial creditors grant debt forgiveness, and why debt forgiveness thereby becomes an optimal strategy for creditors to follow ...
Year of publication: |
1991-07
|
---|---|
Authors: | Aghion, Béatriz Armendariz de |
Institutions: | Centre de développement, Organisation de Coopération et de Développement Économiques (OCDE) |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Long-Term Capital Reflow Under Macroeconomic Stabilization in Latin America
Aghion, Béatriz Armendariz de, (1991)
-
On the Pricing of LDC Debt: An Analysis Based on Historical Evidence from Latin America
Aghion, Béatriz Armendariz de, (1992)
-
The Middle-Income Trap: Comparing Asian and Latin American Experiences
Jankowska, Anna, (2012)
- More ...