DOIAbstract
Market-based Debt Relief Instruments On the secondary market for Third-World external debts, it has been observed that relief has been granted for up to 95%. The obvious idea is to use such relief for remedying the position of Third-World debtors with small financial outlays. This contribution studies this idea in some detail. It shows the assumptions on which debt relief would lead to real consequences for debtors and creditors. Crucial in this context is the assumption that positive relations exist between a country’s output and debt repayments. This is followed by an analysis of the effects of market-based debt relief instruments where repayments are assumed that are unrelated to output
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