Debt Capacity and LDC's Borrowing: A Critical Review

Paul Lanoie

Working Paper from Economics Department, Queen's University

Abstract: This paper reviews the literature on debt capacity and LDC's borrowing. Pioneering theoretical work provided principles of limited practical applicability for judging the sustainability of a particular debt situation. Researchers have tried to address this with an indicator approach. Some studies investigate the way a nation's probability of defaulting affects the funds suppliers' perception of the country's risk translated into a demand for a risk premium. Further extensions are suggested.

Pages: 30 pages
Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:659

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