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Has the Market Solved the Sovereign-Debt Crisis?

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  • Bowe, M.
  • Dean, J.W.
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    Abstract

    Since the beginning of the developing-country debt crisi in mid-1982, economists have puzzled iver its origins. Why did market forces not dater creditors from lending and debtors from borrowing so very much more than could, in retrospect, be repaid? Moreover, once the crisis was under way, why were market forces apparently unable to resolve it on their own? Why was nonmarket intervention employed? Was such intervention rational on ex ante theoretical grounds? Was it justifiable on ex post empirical grounds?

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    Bibliographic Info

    Paper provided by International Economics Section, Departement of Economics Princeton University, in its series Princeton Studies in International Economics with number 83.

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    Length: 70 pages
    Date of creation: 1997
    Date of revision:
    Handle: RePEc:fth:prinfi:83

    Contact details of provider:
    Postal: International Finance Section, Department of Economics Princeton University, Princeton, New Jersey, U.S.A
    Phone: (609) 258-4000
    Fax: (609) 258-6419
    Email:
    Web page: http://www.econ.princeton.edu/
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    Keywords: EXTERNAL FINANCING ; DEBT ; MACROECONOMICS;

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    References

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    5. Boot, Arnoud W A & Kanatas, George, 1995. "Rescheduling of Sovereign Debt: Forgiveness, Precommitment, and New Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 363-77, May.
    6. Borensztein, Eduardo, 1990. "Debt overhang, credit rationing and investment," Journal of Development Economics, Elsevier, vol. 32(2), pages 315-335, April.
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    Cited by:
    1. Claudia M. Buch & Ralph P. Heinrich & Lusine Lusinyan & Mechthild Schrooten, 2000. "Russia's Debt Crisis and the Unofficial Economy," Discussion Papers of DIW Berlin 208, DIW Berlin, German Institute for Economic Research.
    2. Michael D. Bordo & Anna J. Schwartz, 2000. "Measuring Real Economic Effects of Bailouts: Historical Perspectives on How Countries in Financial Distress Have Fared With and Without Bailouts," NBER Working Papers 7701, National Bureau of Economic Research, Inc.
    3. Beoy Kui Ng & Andreas Thorud, 2006. "China’s “Triangle of Woes” and Its Impact on Financial Stability," Economic Growth centre Working Paper Series 0605, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
    4. Buch, Claudia M. & Ralph P., Heinrich & Engerer, Hella & Lodahl, Maria & Schrettl, Wolfram & Schrooten, Mechthild & Gabrisch, Hubert & Linne, Thomas & Sigmund, Peter, 1999. "Die wirtschaftliche Lage Rußlands: Wachstumsperspektive fehlt weiterhin, Schuldenerlaß keine Lösung. Fünfzehnter Bericht," Kiel Discussion Papers 355, Kiel Institute for the World Economy (IfW).

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