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The debt crisis: a re-appraisal

Author

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  • Carlos Alberto Cinquetti

Abstract

The 1980s’ debt crisis is a landmark in developing economies’ growth and stabilization. According to the most quoted empirical articles, external shocks and vicissitudes gave rise to crisis just because of delays in stabilization policies, engendered by internal conflicts and institutional immaturity. I review some of these papers, and find out some problems – in the measurement of shocks and foreign indebtedness, namely - whose corrections lead to opposite results: external shocks and foreign indebtedness explain that crisis regardless of domestic policies. At the same time, the strong correlation of income distribution to terms of trade changes and foreign indebtedness suggest that inequality may have contributed differently to that crisis: either through an economic channel, or through a political channel based on delays in reforms. JEL Classification: F34; F42; E61; 011; 057.

Suggested Citation

  • Carlos Alberto Cinquetti, 2005. "The debt crisis: a re-appraisal," Brazilian Journal of Political Economy, Center of Political Economy, vol. 25(3), pages 209-223.
    • Handle: RePEc:ekm:repojs:v:25:y:2005:i:3:p:209-223:id:639
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    File URL: https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/639/636
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    Cited by:

    1. Ioan TALPOS & Ana-Cristina NICOLESCU & Oana Ramona LOBONT, 2008. "Romanian Public Debt in Interwar Period and Between 1948-1989," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 1(1), pages 49-82.

    More about this item

    Keywords

    External Shocks; Indebtedness; Debt Crisis; Stabilization Policies; Trade Protection; Political Economy;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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