The Management of the Developing Countries' Debt: Guidelines and Applications to Brazil

Some principles which may be useful in formulating a debt management strategy are articulated. There are four major policy recommendations: (1) stretch out the repayment of the debt; (2) monitor both exports and GDP; (3) ignore the capital loss of the creditors; and (4) watch the domestic deficit. The goal of the recommendations is the maximization of the intertemporal welfare of the country under the constraint that it services its debt.