Causes and consequences of the Latin American debt

Tom E. Davis ()

Brazilian Journal of Political Economy, 1984, vol. 4, issue 3, 325-334

Abstract: This paper shows us that the causes of Latin American indebtedness must be analysedfrom two sides. On one side the transformations that took place in the internationalfinancial market and generated an anomalous increase in the supply of credit by internationalprivate banking. On the other side, the economic liberalism that the authoritarianregimes embraced and their social and political necessities to reward the middle-class supporterled them to increase their indebtedness much beyond their capabilities of payment.Considerations are also given to explain why the debtors’ countries have managed to “reschedule”the existing debt individually and not bargain collectively. Problems and consequencesof a “default” by Latin American countries are also analysed in this paper. JEL Classification: F34; H63.

Keywords: Foreign debt; debt crisis (search for similar items in EconPapers)
Date: 1984
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