November 1991

External Adjustment in Selected Developing Countries in the 1990s

William L. Helkie and David H. Howard


An analytic and accounting framework is presented for examining the evolution of the external positions of eight developing countries: Argentina, Brazil, Chile, Korea, Mexico, Peru, the Philippines, and Venezuela. The framework is used to analyze the historical paths of external debts in these countries. Then, under fairly conventional baseline specifications, and assuming that no other relevant factors change significantly, projections for the debt-export ratios in these eight developing countries are generated, using the analytic framework and a simple simulation model. The baseline projections indicate cases in which external adjustment might be warranted. Through the simulation of some alternative scenarios, the analysis then suggests ways and means of effecting the necessary adjustments, including a rough idea of what magnitudes might be involved.

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Last Update: March 05, 2021