Debt and default in the 1930s : Causes and consequences
AbstractThis paper analyzes the 'debt crisis' of the 1930s to see what light this historical experience sheds on recent difficulties in international capital markets. We first consider patterns of overseas lending and borrowing in the 1920s and 1930s, comparing the performance of standard models of foreign borrowing in this period to the 1970s-80s. Next, we analyze the incidence and extent of default on sovereign debt, adapting models of debt capacity to the circumstances of the interwar years. We consider the choices available to investors in those foreign loans which lapsed into default in the 1930s, emphasizing the distinction between creditor banks and bondholders. Finally, we provide the first estimates of the realized rate of return on foreign loans floated between the wars, based on a sample of dollar and sterling bonds issued in the 1920s.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 30 (1986)
Issue (Month): 3 (June)
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Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Eichengreen, Barry & Portes, Richard, 1985. "Debt and Default in the 1930s: Causes and Consequences," CEPR Discussion Papers 75, C.E.P.R. Discussion Papers.
- Barry J. Eichengreen & Richard Portes, 1986. "Debt and Default in the 1930s: Causes and Consequences," NBER Working Papers 1772, National Bureau of Economic Research, Inc.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William A. Darity, 1985. "Loan pushing : doctrine and theory," International Finance Discussion Papers 253, Board of Governors of the Federal Reserve System (U.S.).
- Carlos F. Diaz-Alejandro, 1984. "Latin American Debt: I Don't Think We Are in Kansas Anymore," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(2), pages 335-403.
- Eaton, Jonathan & Gersovitz, Mark, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Wiley Blackwell, vol. 48(2), pages 289-309, April.
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