Part 1-V Section Outline

The 1980s: The Debt Crisis and The Lost Decade

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1. An Overview of the Debt Crisis
   1. Petrodollar Recycling by Commercial Banks to Developing Countries Gave Rise to the Debt Crisis.
   2. Decreased Exports and High Interest Rates in the Early 1980s Caused Debtor Countries to Default on Their Foreign Loans.
   3. Case-by-Case Debt Restructuring Negotiations Saved the International Financial System from Collapse.
   4. "Debt Fatigue" Appeared in the Mid-1980s.
   5. The Brady Initiative in 1989 Focused on Debt Reduction Strategies.
   6. Brady Deals Combined with Economic Reforms and Increased Flows of Capital to Debtor Countries Led Some Observers in the Early 1990s to Declare that the Debt Crisis was Over.
2. Stabilization and Adjustment Programs
   1. IMF Stabilization Measures Tried to Cool Down Overheated Economies.
   2. World Bank Structural Adjustment Measures Promoted Market-Based Reforms to Increase Efficiency.
3. The Social Costs of the Debt Crisis: The Lost Decade of Development
   1. The Debt Crisis Brought Debtor Countries’ Economies to a Halt and Wiped Out Gains in Social Welfare.
   2. Post-Crisis Studies have Shown that Stabilization and Structural Adjustment Programs have had Mixed Effects on Poverty and Income Distribution.

[Part One Bibliography]

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