From Ohlin Lectures
Economic Stabilization and Debt in Developing Countries
Drawing on preliminary results from a massive study conducted by the World Bank to probe the links between stabilization and growth, Cooper examines the experience of developing countries faced by the oil shocks of the 1970s and the debt crisis of the 1980s. He points out that a global slowdown in growth has shifted the main economic concern in developing countries from long-term growth to stabilization and adjustment. Cooper takes into account the cross-country variables that influence the degree to which a country is affected negatively or positively by external shocks and covers such topics as political organization and external debt resolution.
The first chapter focuses on countries that experienced adverse shocks from the sharp increase in oil prices beginning in 1974. It also addresses countries that should have benefited from the oil price increase, and from a comparable increase in coffee prices, for which events turned out to be less favorable than they seemed. The second chapter analyzes the "disabsorption" a country faces when it can no longer rely on foreign lending or advantageous terms of trade; it also looks at inflationary pressures and at the role of the International Monetary Fund in designing stabilization programs for its member countries. The third chapter discusses the main influences on a country's economic performance and also discusses the lessons offered for successful stabilization and long-term growth. Moving from individual developing nations to the world economic system, the final two chapters examine the question of external debt and why it has proved to be such an international stumbling block, offering suggestions on how it might be resolved.
HardcoverOut of Print ISBN: 9780262031875 214 pp. | 7.9 in x 5.5 in
This book is typical of Richard Cooper's work. The analysis is rigorous but very accessible. The conclusions are sensible. The book makes good use of economic theory and empirical evidence, with a view to drawing lessons for policy. The literature on this subject is vast, but I know of no single book that competes closely with this one.
Peter B. Kenen
Walker Professor of Economics and International Finance, Princeton University