Factors Determining External Debt

Against the background of the international debt problem which originated with the oil shocks of the seventies, this book undertakes a theoretical analysis of the factors determining aggregate external debt, using the example of a raw material importing country. Instead of the usual static definition of the trade balance as the difference between the value of exports and imports in a single period, here an intertemporal approach is used with a country's current account balance determined as the difference between aggregate saving and aggregate net investment, variables which are primarily dependent on expectations about the future. The analysis is based on microeconomic optimization models which enables individual causal relationships to be presented in a detailed way, the "optimal" size of external debt to be determined and the desirability of an immediate adjustment in the level of debt following an external disturbance to be shown from a welfare point of view.

Auteur
Professor Dr. Gerhard Rübel (Jg. 1951) absolvierte seine wissenschaftliche Ausbildung an der Universität Mannheim, wo er 1977 das Studium der Volkswirtschaftslehre abschloss. Es folgte die Promotion (1981) und die Habilitation (1988). Seit 1989 ist er als Universitätsprofessor tätig. Nach Lehrstuhlvertretungen in Mannheim und Essen war er Lehrstuhlinhaber in Mainz (Theoretische Volkswirtschaftslehre, 1991-1992) und in Passau (Volkswirtschaftslehre, Geld und Außenwirtschaft, 1992-2003). Seit 2003 ist er Professor für Volkswirtschaftstheorie, Internationale und Monetäre Ökonomik an der Universität Göttingen. Professor Rübel widmet sich der Lehre auch außerhalb der Universitäten, so etwa an der Verwaltungs- und Wirtschaftsakademie. Außerdem war er bis zu seinem Weggang aus Passau Dozent an der Bayerischen Eliteakademie in München und Vertrauensdozent der Akademie an der Universität Passau.

Contenu

1. Introduction.- 2. External Debt and The Balance On Current Account.- 2.1. The External Debt Position of a Single Country.- 2.2. A More Expensive Imported Raw Material and the Current Account Balance.- 2.3. The Current Account Balance as the Difference Between Aggregate Saving and Aggregate Net Investment.- 3. The Determinats of External Debt - The Basic Model of a Small Open Economy.- 3.1. The Structure of the Model.- 3.2. Determineants of the Present Value of Real Disposable Wealth.- 3.3. Factors Determining External Debt.- Erroneous Expectations.- Summary of the Result of the Basic Model.- 4. Non-Traded Goods and the Balance on Current Account.- 4.1. The Structure of the Model.- 4.2. Determinants of the External Debt.- 4.3. Direct and Indirect Effects of a Change in the Raw Material Price on the Current Account Balance.- 4.4. Government Activity and the Balance on Current Account.- 4.5. Labor Mobility in Period 2.- 4.6. Summary of the Results.- 5. External Debt in General Equilibrium Models.- 5.1. A Raw Material Exporting Country and a Raw Material Importing Country.- 5.2. Three Country Relationships.- 5.2.3. Factors Determining the Balance on Current Account in the Raw Material Importing Countries.- 5.2.4. Factors that Influence World Goods Markets.- 5.2.5. Direct and Indirect Factors that Determine External Debt.- 5.2.6. Government Activity and the International Structure of External Debt.- 5.3. Summary of the Results.- 6. An Extended Planning Horizon.- 6.1. The Structure of the Three Period Model.- 6.2. Change in Raw Materials Prices and Real Interest Rates within an Extended Planning Horizon.- 6.3. Expected and Unexpected Rises in Raw Material Prices.- 6.4. Inflexibilty Real Wages, Welfare and Tariffs on Imports.- 6.5. Summary of the Results.- 7. Conclusion.- Appendices.- Appendix to Chapter 3.- Appendix to Chapter 5.- Appendix to Chapter 6.