The boom and bust of latin American lending, 1970-1992

Robert Grosse, Lawrence G. Goldberg

Research output: Contribution to journalArticle

4 Scopus citations

Abstract

External borrowing by debtors in Latin America has followed a rollercoaster pattern during the past two decades. From 1970-1981, the growth of external borrowing averaged 27% per year across the region, while from 1982-1992 foreign debt grew at a rate of 4.3% per year. This paper analyzed the factors which contributed to this pattern of borrowing, from the perspectives of both the lenders (particularly commercial banks) and the borrowers (particularly national governments). A pooled cross-section, time series model was estimated to explain the growth of foreign debt in 18 Latin American countries during the period 1970-1992. In the full period and in one or both sub-periods individually, the growth of foreign debt was significantly positively correlated with GNP and per capita GNP. Debt growth was significantly negatively correlated with the country's trade balance.

Original languageEnglish (US)
Pages (from-to)285-298
Number of pages14
JournalJournal of Economics and Business
Volume48
Issue number3
StatePublished - Jan 1 1996
Externally publishedYes

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Keywords

  • Latin American lending

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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