Foreign debt and financial fragility in the perspective of the emerging countries


  • Mario Tonveronachi



Debt, Foreign Debt


Following the financial fragility approach of H. Minsky and its later extension by J. Kregel, the paper addresses some basic aspects of the dynamics and management of foreign debt in the perspective of the emerging countries. Minsky's definitions of hedge, speculative and Ponzi positions are restated in order to define a country's external fragility. How international asymmetries in the external financial fragility may influence global fragility is then discussed, leading to analyse the limits of financial openness. Finally, the distinction between domestic and external financial fragility permits to look at how the dynamic interplay among the economic units, including the government and its policies, may influence both the distribution and the level of the two types of fragilities.

JEL Codes: F21, F32, F34


EICHENGREEN, B. (1991), "Historical research on international lending and debt", journal of Economic Perspectives, vol. V, no. 2, pp. 149-69.

KREGEL, J. (1997), "Margins of safety and weight of the argument in generating financial fragility", journal of Economic Issues, vol. XXXI, no. 2, pp. 543-48.

KREGEL, J. (2004), "Can we create a stable international financial environment that ensures net resources transfers to developing countries?", journal of Post Keynesian Economics, vol. 26, no. 4, pp. 573-90.

MINSKY, H. (1986), Stabilizing an Unstable Economy, Yale University Press, Yale.

REINHART, C. and K. ROGOFF (2004), "Serial default and the 'paradox' of rich-to-poor capital flows", American Economic Association, Papers and Proceedings, vol. 94, no. 2, pp. 53-58.

ROGOFF, K (2003), "The IMF strikes back", Foreign Policy, January/February.

TONVERONACHI M. (2006), "The role of foreign banks in emerging countries. The case of Argentina, 1993-2000", Investigacion Economica, enero-marzo, pp. 15-60.




How to Cite

Tonveronachi, M. (2012). Foreign debt and financial fragility in the perspective of the emerging countries. PSL Quarterly Review, 59(236).




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