Buybacks of LDC Debt and the Scope for Forgiveness
Béatriz Armendariz de Aghion
This paper explains why a debtor country may be eager to spend foreign exchange reserves on the retirement of its cross-border obligations at market prices. A simple two-period framework shows that such spending can be profitable to both the debtor countries and their foreign creditors, and thereby provides an explanation as to why the so-called buybacks of LDC debt actually take place. An extended version of the basic framework shows how buybacks can be induced by having commercial creditors grant debt forgiveness, and why debt forgiveness thereby becomes an optimal strategy for creditors to follow ...
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.