Synopsis

For dozens of developing countries, the financial upheavals of the 1980s have set back economic development by a decade or more. Poverty in those countries has intensified as they struggle under the burden of an enormous external debt. In 1988, more than six years after the onset of the crisis, almost all the debtor countries were still unable to borrow in the international capital markets on normal terms. Moreover, the world financial system has been disrupted by the prospect of widespread defaults on those debts. Because of the urgency of the present crisis, and because similar crises have recurred intermittently for at least 175 years, it is important to understand the fundamental features of the international macroeconomy and global financial markets that have contributed to this repeated instability.

This project on developing country debt, undertaken by the National Bureau of Economic Research, provides a detailed analysis of the ongoing developing country debt crisis. The project focuses on the middle-income developing countries, particularly those in Latin America and East Asia, although many lessons of the study should apply as well to other, poorer debtor countries. The project analyzes the crisis from two perspectives, that of the international financial system as a whole (volume 1) and that of individual debtor countries (volumes 2 and 3).

Booknews

First of a four volume set which is the result of an NBER project. Specific topics include the history of international lending and its implications for reform of the current system; alternative approaches for the design of stabilization programs; and debtor countries' problems in adjusting to the debt crisis. The final three papers examine developed countries and their financial institutions. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Biography

Jeffrey D. Sachs is director of The Earth Institute at Columbia University and special adviser to United Nations Secretary-General Ban Ki-moon on the Millenium Development Goals. He is internationally renowned for his work as an economic adviser to governments and international organizations around the world.