Browsing by Author "Mueller, Richard E. (Richard Edmund), 1962-"

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    The Mexican debt crisis: an examination of policy options
    (1987) Mueller, Richard E. (Richard Edmund), 1962-; Wright, Robert W.
    Since August 1982, Mexico has been at the forefront of the international debt crisis. A number of factors which date back to the end of the Second World War have been responsible for Mexico's inability to service its external debt. Since 1982, Mexico has constantly been subjected to rigorous internal adjustment policies dictated to the country by its creditors and the International Monetary Fund in an attempt to enhance Mexico's ability to service its debt. Yet today, Mexico is not any closer to resolving its debt dilemma than it was in August 1982, and the burden of this debt overhang has been forced upon those least responsible for it, the lower income groups. Over the past five years numerous solutions to the problem have been offered by bankers, politicians and academics. A number of these proposals are examined. Finally, the option of default is discussed as a viable policy option. It is asserted that a default declared by creditor nations could result in short-term costs and distortions in financial markets, but in the long-term these costs would pale in comparison to the benefits of renewed economic growth and increased trade for Mexico and creditor countries alike.