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Will the Latin American Countries ever Pay their Debt?

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  • Baffes, John
  • Chambers, Robert G.

Abstract

The 1980s have been characterized by major borrowing levels of the Latin American countries. A common question asked by the creditors is whether these countries will be able to pay their debt back. This paper gives an answer to this question by utilizing the theory of cointegration. The results show that some of the countries have indeed violated their borrowing limits and thus the probability of paying the debt becomes small.

Suggested Citation

  • Baffes, John & Chambers, Robert G., 1990. "Will the Latin American Countries ever Pay their Debt?," 1990 Annual meeting, August 5-8, Vancouver, Canada 270991, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea90:270991
    DOI: 10.22004/ag.econ.270991
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    References listed on IDEAS

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    5. Pastor, Manuel Jr., 1989. "Current account deficits and debt accumulation in Latin America: Debate and evidence," Journal of Development Economics, Elsevier, vol. 31(1), pages 77-97, July.
    6. Jeffrey D. Sachs, 1985. "External Debt and Macroeconomic Performance in Latin America and East Asia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 523-573.
    7. Rudiger Dornbusch, 1985. "Policy and Performance Links between LDC Debtors and Industrial Nations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 303-368.
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