This paper constructs and analyzes an optimizing model of a highly-indebted small open economy. An important innovation in the model is the incorporation of sovereign risk through the specification of an upward-sloping foreign debt supply function. The model is used to examine the interaction between external debt and growth in response to various policies and exogenous disturbances. It is shown that structural policies intended to reduce the fiscal deficit or increase productivity can lead to tradeoffs in their effect on capital accumulation and the stock of debt.

This volume contains a series of 21 papers presented at the International Conference of Economists, held at the University of Zagreb, Yugoslavia. The contributors discuss policy issues of macro-economic managment and offer general and overall approaches to the debt and growth problems of the 1980s.

This Guide provides clear, up-to-date guidance on the concepts, definitions, and classifications of the gross external debt of the public and private sectors, and on the sources, compilation techniques, and analytical uses of these data. The Guide supersedes the previous international guidance on external debt statistics available in External Debt: Definition, Statistical Coverage, and Methodology (known as the Gray Book), 1988. The Guides conceptual framework derives from the System of National Accounts 1993 and the fifth edition of the IMFs Balance of Payments Manual(1993). Preparation of the Guide was undertaken by an Inter-Agency Task Force on Finance Statistics, chaired by the IMF and involving representatives from the BIS, the Commonwealth Secretariat, the European Central Bank, Eurostat, the OECD, the Paris Club Secretariat, UNCTAD, and the World Bank.

A major economic dilemma for the developing world--how to achieve interest rate levels that are not inflationary but are high enough to encourage saving and domestic development--is brought into sharp focus by a leading economist with over twenty-five years experience working with third world governments. In this comprehensive analysis of the causes and international consequences of high US interest rates, Benoit thoughtfully considers many factors. Contrasting Islamic and Western banking practices; describing the real causes of the international debt crisis; revealing the strategies of creditor banks, debtor countries and others; and focusing particularly on Third World dependence on US economic health, the author offers an honest appraisal of the extent to which developing countries are responsible for their own predicament. He questions the basic premises underlying US and other aid policies and calls for increased efficiency, honesty, and self-reliance on the part of developing countries.