Latin America's recovery from debt problems : an assessment of model-based projections

Economic assumptions used in assessing prospective economic adjustment of Latin America in response to its debt problems are explored. The analysis compares forecasts obtained by combining parameter estimates from different researchers' trade models with the authors' macroeconomic models for Brazil, Chile and Mexico. By simulation analysis, the authors address the issues of the likelihood of high domestic growth rates in the late 1980s and the effects of dollar depreciation and high interest rates on Latin America's debt prospects