An international comparison of the causes of changes in the debt service ratio 1980-1985

Authors

  • H.D. GIBSON
  • A.P. THIRLWALL

DOI:

https://doi.org/10.13133/2037-3643/11111

Keywords:

International debt crisis, amortisation, interest, exports, debt-management

Abstract

The forces leading up to the debt crisis of the 1980s go back a long way. As a country experiences a rising ratio of debt service payments to export earnings so its default risk increases. World indicators show that interest rates were on a rising trend when commodity prices were on a downward trend. However, this is a simplistic analysis. The authors disaggregate the ratio into five components: a change in the volume of debt; a change in the rate of amortisation; a change in the rate of interest; a change in the volume of exports; a change in the price of exports. The article examines these independently in the light of the available data. Results suggest that rescheduling policy is uncoordinated and that debt-management methods can be improved.

 

JEL: F34, H63, E43

Downloads

Published

2013-11-23

How to Cite

GIBSON, H., & THIRLWALL, A. (2013). An international comparison of the causes of changes in the debt service ratio 1980-1985. PSL Quarterly Review, 42(168). https://doi.org/10.13133/2037-3643/11111

Issue

Section

Editorial