It describes sovereign risk and theories of indebtedness. Discussion is based on the following three papers:
Eaton, Gersovitz, Stiglitz (1986), “The Pure Theory Of Country Risk”, EER
(ii) Krugman (1985), “International Debt Strategies In An Uncertain World” in Smith & Cuddington (Ed.) “International Debt and the Developing Countries”
(iii) Basu (1991), ‘The International Debt Problem, Credit Rationing and Loan Pushing: Theory and Experience’, Princeton Studies In International Finance No- 70
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