Private Capital Flows and Developing Country Adjustment: Some Lessons of the Debt Crisis

  • Christopher Huhne
Part of the Financial And Monetary Policy Studies book series (FMPS, volume 17)


It is not realistic to expect even middle-income debtors fully to service their debt. The combined operation of a high stock of debt, high real interest rates, compound interest and negligible new private capital flows make orthodox adjustment exceptionally severe. The debt crisis is far from being resolved.


Foreign Currency Trade Credit Debt Crisis Negative Transfer Debt Service 
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  1. Salomon Bros, quoted in World Bank’s World Debt Tables, volume 1, 1987—88 edition, Washington DC.Google Scholar
  2. Sanjay Dhar in Federal Reserve Bank of New York Quarterly Review, Autumn 1983, volume 8, No. 3.Google Scholar
  3. United Nations Conference on Trade and Development; Trade and Development Report 1985, Geneva p. 5.Google Scholar
  4. Debt and Danger: the World Financial Crisis by Harold Lever and Christopher Huhne, Penguin, London, 2nd edition, 1987.Google Scholar
  5. Mario Henrique Simonsen, “The Developing Country Debt Problem” in G. Smith and J. Cuddington (eds) International Debt and the Developing Countries, World Bank, Washington DC, 1985.Google Scholar
  6. See for a discussion of the lack of legal remedies: Anatole Kaletsky, The Cost of Default, Twentieth Century Fund paper, Priority Press publications, New York, 1985.Google Scholar
  7. J. M. Keynes, The General Theory, p. 156, Macmillan edition for the Royal Economic Society, 1973.Google Scholar
  8. Tim Congdon, The Debt Threat, Blaekwells, Oxford, 1988.Google Scholar

Copyright information

© Kluwer Academic Publishers 1989

Authors and Affiliations

  • Christopher Huhne

There are no affiliations available

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