Abstract
Macroeconomic problems in the world economy are, from a developing country’s point of view, dominated by the twin problems of debt and protectionism. Earlier papers on North-South interactions (Dornbusch, 1985; Sachs and McKibbin, 1985; van Wijnbergen, 1985a, b) focused on the impact of Northern trade and fiscal policies on world real interest rates and hence on the burden of Southern debt. In this paper, I take the transfer the South needs to make to the North on principal and debt service as given; instead the focus is on how trade policy in the North exacerbates the problem of effecting that transfer.
This paper was written during a visit to Tel Aviv University, which provided a hospitable work environment. I thank Gene Grossman, Inderm it Gill, Ricardo Martin and Nadeem Ul Haque for helpful discussions. The views in this paper are my own, and do not necessarily reflect those of the institutions with which I am associated. I thank the German Marshall Fund for financial assistance with travel expenses.
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© 1987 International Economic Association and Centre for Economic Policy Research
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van Wijnbergen, S. (1987). Protectionism and the Debt Crisis. In: Bryant, R.C., Portes, R. (eds) Global Macroeconomics: Policy Conflict and Cooperation. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18916-8_9
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DOI: https://doi.org/10.1007/978-1-349-18916-8_9
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