TY - BOOK ID - 84542230 TI - Sources of Debt Accumulation in a Small Open Economy PY - 1997 SN - 1462386202 1452727007 1282110888 9786613803764 1451901712 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Banks and Banking KW - Exports and Imports KW - Open Economy Macroeconomics KW - Computable and Other Applied General Equilibrium Models KW - International Financial Markets KW - Empirical Studies of Trade KW - International Lending and Debt Problems KW - Trade: General KW - Interest Rates: Determination, Term Structure, and Effects KW - International economics KW - Finance KW - Terms of trade KW - External debt KW - Real interest rates KW - Exports KW - Imports KW - International trade KW - Financial services KW - Economic policy KW - nternational cooperation KW - Debts, External KW - Interest rates KW - Dominican Republic UR - https://www.unicat.be/uniCat?func=search&query=sysid:84542230 AB - This paper analyzes the borrowing behavior of a small open economy of a developing country that relies heavily on imports for its capital formation and faces an upward-sloping supply function of foreign loans. Decision makers face uncertainty about the longevity of external shocks. That uncertainty generates forecast errors that lead to substantial debt accumulation. It is found that the assumption of an upward-sloping supply function of foreign loans, which is a more realistic formulation for developing countries than the usual perfect elasticity, offers an alternative to the Uzawa-type utility function for analyzing asset accumulation in the small open economy framework. ER -