. Conclusion Our simple credit-rating model captures key features of the Brazil-type debt crisis. Its applicability to Brazil lies in two common features. (1) Both in the model and in the case of Brazil, macro fundamentals are not shaky (e.g., the primary surplus in Brazil in the wake of the crisis was about 2.25 percent of the GNP). (2) Both in the model and in the Brazilian case, the “coordinator” of market expectations that shift the market outcome is extraneous to the market economy. In Brazil the expectations coordinator appears to have been forthcoming