Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten
AbstractEven after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9750.
Date of creation: Nov 2013
Date of revision:
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Other versions of this item:
- Carmen Reinhart & Kenneth Rogoff, 2013. "Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten," IMF Working Papers 13/266, International Monetary Fund.
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- F3 - International Economics - - International Finance
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- G1 - Financial Economics - - General Financial Markets
- H6 - Public Economics - - National Budget, Deficit, and Debt
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-06-02 (All new papers)
- NEP-CBA-2014-06-02 (Central Banking)
- NEP-HIS-2014-06-02 (Business, Economic & Financial History)
- NEP-MAC-2014-06-02 (Macroeconomics)
- NEP-OPM-2014-06-02 (Open Economy Macroeconomics)
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.:
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Le rÃ´le des banques centrales lors du cycle financier selon Claudio Borio
by ? in D'un champ l'autre on 2014-02-17 16:58:00
- Alimenter lâinflation pour rÃ©duire la dette publique ?
by ? in D'un champ l'autre on 2014-06-14 17:29:00
- LâEurope peut-elle compter sur de larges excÃ©dents primaires pour rÃ©soudre ses problÃ¨mes dâendettement ?
by ? in D'un champ l'autre on 2014-07-22 23:58:00
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13/28, International Monetary Fund.
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- Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Review and Evidence," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 13(3), pages 1-23.
- Stijn Claessens & M. Ayhan Kose & Luc Laeven & Fabián Valencia, 2013.
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2013-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Stijn Claessens & M. Ayhan Kose & Luc Laeven & Fabián Valencia, 2013. "Understanding Financial Crises: Causes, Consequences, and Policy Responses," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 1301, Koc University-TUSIAD Economic Research Forum.
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