Rudiger Dornbusch, in The World Economy (June
Debt Crisis 1984), Basil Blackwell Publisher Ltd, 108 Cowley Rd., Oxford OX4 lJF, United Kingdom.
In August 1982, Mexico declared itself unable to pay its foreign debts, and in quick succession, Brazil and several other Third World countries followed suit. Wall Street and Washington were shaken; the over- extended international banking system would be acutely threatened if any single debtor nation actually defaulted.
As Dornbusch, an MIT economist,...