External debt and balance of payments adjustment in some non-oil-exporting less-developed countries

Thesis/Dissertation · Tue Jan 01 04:00:00 EST 1985

OSTI ID:5319809

Bhattasali, D

The post-1970 period has been marked by severe disturbances in the balance of payments of the 88 non-oil-exporting less-developed countries, the NOLDCs. The response of the NOLDC authorities to external imbalance was characterized by a combination of policies to enlarge the supply and reduce the demand for foreign exchange. This dissertation examines the short-run policy response to balance of payments disequilibria by studying, in the context of a foreign exchange constrained optimizing framework, the allocation of the adjustment burden among imports, reserve accretions, and external borrowing. The model is estimated with quarterly data for ten NOLDCs, which were selected on the basis of income levels, openness and level of external debt, to provide a range of country experience. Two different sets of parameter estimates were obtained, the first relating to the allocation of the adjustment burden among imports, reserves and debt, and the second to the determinants of target-setting behavior for the same variables. The econometric procedure - nonlinear generalized least squares - yields estimates which suggest that the model is a useful description of short-run behavior. In general, it suggests that, contrary to the popular view of profligate NOLDC balance of payments behavior, the countries in the sample smartly adjusted imports to achieve external balance.

• Research Organization: Boston Univ., MA (USA)
• OSTI ID: 5319809
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
DEVELOPING COUNTRIES
ECONOMIC ANALYSIS
ECONOMIC IMPACT
ECONOMIC POLICY
ECONOMICS
ENERGY EXPENSES
ENERGY POLICY
GOVERNMENT POLICIES
OIL-IMPORTING COUNTRIES