A non-linear model is presented to give a global analysis of international debt and trade. It offers an alternative to the sunk-cost explanation of hysteresis, structural breaks and irreversibility. In particular, we show that a natural resource discovery, which turns out to be temporary ex post, may cause a long-term deterioration in the trade balance. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classifications: F32; F40.
|Number of pages||10|
|Publication status||Published - 1999|
- international debt