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pros and cons of debt forgiveness

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I am having difficulty making a case for or against forgiving developing country's debt.

This is an open-ended question. Consider the response from a purely economic (MACROeconomic) perspective then reconsider the answer from a political perspective. Did the answer change, why or why not?

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Solution Summary

The pros and cons of debt forgiveness are discussed. The political perspectives to consider forgiving developing country's debt is determined.

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The primary argument against forgiving the debts of third world nations is that it is morally incumbent upon everyone to repay debts. It is therefore unfair to expect creditors of developing nations to absorb this expense. Countering this position is the fact that many of these debts were made during the Cold War for purposes of political jockeying. Loans were given without ...

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