----- Original Message ----- From: "Bradford DeLong" <jbdelong at uclink.berkeley.edu>
>
> Devalue, default, and dollarize is my favorite option. Dollarization
> helps you avoid the hyperinflation that is the likely consequence of
> a large devaluation. If you structure default in a way to preserve
> the principal while cutting back interest to U.S. Treasury levels,
> the New York banks won't be *that* unhappy. And devaluation is
needed
> if you are to have any hope of generating an export boom.
>
> Of course, time is wasting...
>
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Ok, but what happens when the incentives for increased labor productivity aren't part of the package?
Ian