Recent Developments in the Central American Debt Crisis

  • Raul Moncarz


The advice offered for the international debt crisis is much like the advice offered to the rabbit who to his distress found that he could not eat grass.1 Under great anxiety he went to the wise owl thought to be knowledgeable about such problems to discuss the situation. The wise owl said, ‘Turn yourself into a squirrel and eat nuts.’ ‘But how do I do that?’ asked the rabbit. ‘I don’t know,’ said the wise owl, ‘I just set policy.’ And so it is with the realities of the global market and the crumbling of national walls. But what should the debtor countries be doing? What should creditors do? Do such market-oriented solutions as DESs hold the promise of their proponents? Is the best defence (for example, Honduras’s attempt to overvalue its currency) a good offence when domestic and international repercussions are considered?


Monetary Policy Commercial Bank Real Interest Rate Debt Crisis External Debt 
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© Antonio Jorge and Jorge Salazar-Carrillo 1992

Authors and Affiliations

  • Raul Moncarz

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