This paper analyzes LDC borrowing and reserve-holding behavior as part of a general equilibrium portfolio problem. Estimates of LDC debt and reserve demand and credit supply suggest that debt, along with reserves, serves a transactions role. Another finding is that most LDC borrowers are credit constrained. An analysis of LDC export behavior suggests that defaults are likely to be independent, uncorrelated phenomena.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics