Systemic And Idiosyncratic Sovereign Debt Crises
The theoretical literature on sovereign defaults has focused on adverse shocks to debtors’ economies, suggesting that defaults are of an idiosyncratic nature. Still, sovereign debt crises are also of a systemic nature, clustered around panics in the financial center such as the European Sovereign Debt Crisis in the aftermath of the U.S. Subprime Crisis in 2008. Crises in the financial centers are rare disasters and thus, their effects on the periphery can only be captured by examining long episodes. This paper examines sovereign defaults from 1820 to the Great Depression, with a focus on Latin America. We find that 63% of the crises are of a systemic nature. These crises are different. Both the international collapse of liquidity and the growth slowdown in the financial centers are at their core. These global shocks trigger longer default spells and larger investors’ losses.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 14 (2016)
Issue (Month): 1 (February)
|Contact details of provider:|| Web page: http://www.eeassoc.org/|
More information through EDIRC
References listed on IDEAS
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.:
- Márcio Gomes Pinto Garcia & Roberto Rigobon, 2004.
"A Risk Management Approach to Emerging Market’s Sovereign Debt Sustainability with an Application to Brazilian Data,"
Textos para discussão
484, Department of Economics PUC-Rio (Brazil).
- Marcio Garcia & Roberto Rigobon, 2004. "A Risk Management Approach to Emerging Market's Sovereign Debt Sustainability with an Application to Brazilian Data," NBER Working Papers 10336, National Bureau of Economic Research, Inc.
- Yue, Vivian Z., 2010. "Sovereign default and debt renegotiation," Journal of International Economics, Elsevier, vol. 80(2), pages 176-187, March.
- Aguiar, Mark & Gopinath, Gita, 2006.
"Defaultable debt, interest rates and the current account,"
Journal of International Economics,
Elsevier, vol. 69(1), pages 64-83, June.
- Mark Aguiar & Gita Gopinath, 2004. "Defaultable debt, interest rates and the current account," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
- Mark Aguiar & Gita Gopinath, 2004. "Defaultable debt, interest rates, and the current account," Working Papers 04-5, Federal Reserve Bank of Boston.
- Mark Aguiar & Gita Gopinath, 2004. "Defaultable Debt, Interest Rates and the Current Account," NBER Working Papers 10731, National Bureau of Economic Research, Inc.
- Sturzenegger, Federico & Zettelmeyer, Jeromin, 2008.
"Haircuts: Estimating investor losses in sovereign debt restructurings, 1998-2005,"
Journal of International Money and Finance,
Elsevier, vol. 27(5), pages 780-805, September.
- Jeronimo Zettelmeyer & Federico Sturzenegger, 2005. "Haircuts; Estimating Investor Losses in Sovereign Debt Restructurings, 1998-2005," IMF Working Papers 05/137, International Monetary Fund.
- Federico Sturzenegger and Jeromin Zettelmeyer, 2006. "Haircuts: Estimating Investors Losses in Sovereign Debt Restructurings, 1998-2005," Business School Working Papers 2006-02, Universidad Torcuato Di Tella.
- Cristina Arellano, 2008.
"Default Risk and Income Fluctuations in Emerging Economies,"
American Economic Review,
American Economic Association, vol. 98(3), pages 690-712, June.
- Arellano, Cristina, 2008. "Default risk and income fluctuations in emerging economies," MPRA Paper 7867, University Library of Munich, Germany.
- Julie A Kozack, 2005. "Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings," IMF Policy Discussion Papers 05/09, International Monetary Fund.
- Federico Sturzenegger & Jeromin Zettelmeyer, 2007. "Creditors' Losses Versus Debt Relief: Results from a Decade of Sovereign Debt Crises," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 343-351, 04-05.
- Martin Schneider & Aaron Tornell, 2004. "Balance Sheet Effects, Bailout Guarantees and Financial Crises," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 883-913.
- Roberto Rigobon & Marcio Garcia, 2004. "A Risk Management Approach to Emerging Marketâ€™s Sovereign Debt Sustainability with an application to Brazilian data," Econometric Society 2004 Latin American Meetings 24, Econometric Society.
- Juan Braun-Llona & Matías Braun-Llona & Ignacio Briones & José Díaz & Rolf Lüders & Gert Wagner, "undated". "Economía Chilena 1810-1995. Estadísticas Históricas," Documentos de Trabajo 187, Instituto de Economia. Pontificia Universidad Católica de Chile..
- Tobias Adrian & Paolo Colla & Hyun Song Shin, 2013.
"Which Financial Frictions? Parsing the Evidence from the Financial Crisis of 2007 to 2009,"
NBER Macroeconomics Annual,
University of Chicago Press, vol. 27(1), pages 159-214.
- Tobias Adrian & Paolo Colla & Hyun Song Shin, 2012. "Which Financial Frictions? Parsing the Evidence from the Financial Crisis of 2007 to 2009," NBER Chapters,in: NBER Macroeconomics Annual 2012, Volume 27, pages 159-214 National Bureau of Economic Research, Inc.
- Hadass, Yael S & Williamson, Jeffrey G, 2003.
"Terms-of-Trade Shocks and Economic Performance, 1870-1940: Prebisch and Singer Revisited,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 51(3), pages 629-656, April.
- Yael S. Hadass & Jeffrey G. Williamson, 2001. "Terms of Trade Shocks and Economic Performance 1870-1940: Prebisch and Singer Revisited," NBER Working Papers 8188, National Bureau of Economic Research, Inc.
- Jonathan Eaton & Mark Gersovitz, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Oxford University Press, vol. 48(2), pages 289-309.
- Rui Pedro Esteves, 2013. "The bondholder, the sovereign, and the banker: sovereign debt and bondholders' protection before 1914," European Review of Economic History, Oxford University Press, vol. 17(4), pages 389-407, November.
- Renee Fry & Callum Jones & Christopher Kent, 2010. "Inflation in an Era of Relative Pirce Shocks," CAMA Working Papers 2010-38, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Juan J. Cruces & Christoph Trebesch, 2013.
"Sovereign Defaults: The Price of Haircuts,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 5(3), pages 85-117, July.
- Juan J. Cruces & Christoph Trebesch, 2011. "Sovereign Defaults: The Price of Haircuts," CESifo Working Paper Series 3604, CESifo Group Munich.
- Cruces, Juan J. & Trebesch, Christoph, 2013. "Sovereign defaults: The price of haircuts," Munich Reprints in Economics 20036, University of Munich, Department of Economics.
- Bennett W Sutton & Luis Catão, 2002. "Sovereign Defaults; The Role of Volatility," IMF Working Papers 02/149, International Monetary Fund.
- Mitchener, Kris James & Weidenmier, Marc D., 2010. "Supersanctions and sovereign debt repayment," Journal of International Money and Finance, Elsevier, vol. 29(1), pages 19-36, February.
- Ocampo, José Antonio & Parra, María Angela, 2003.
"The terms of trade for commodities in the twentieth century,"
Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
- Jose Antonio Ocampo & Maria Angela Parra, 2004. "The Terms Of Trade For Commodities In The Twentieth Century," International Trade 0402006, EconWPA.
- Eichengreen, Barry & Portes, Richard, 1986. "Debt and default in the 1930s : Causes and consequences," European Economic Review, Elsevier, vol. 30(3), pages 599-640, June.
- 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, 1985. "Debt and Default in the 1930s: Causes and Consequences," NBER Working Papers 1772, National Bureau of Economic Research, Inc.
- Natalia Kovrijnykh & BalÃ¡zs Szentes, 2007. "Equilibrium Default Cycles," Journal of Political Economy, University of Chicago Press, vol. 115, pages 403-446.
- David Benjamin & Mark L. J. Wright, 2009. "Recovery Before Redemption: A Theory Of Delays In Sovereign Debt Renegotiations," CAMA Working Papers 2009-15, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- AfDB AfDB, . "AfDB Group Annual Report 2006," Annual Report, African Development Bank, number 62 edited by Koua Louis Kouakou.
- Basu, Parantap & McLeod, Darryl, 1991. "Terms of trade fluctuations and economic growth in developing economies," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 89-110, November.
- World Bank, 2007. "The World Bank Annual Report 2007," World Bank Publications, The World Bank, number 7534, January.
- Angus Deaton, 1999. "Commodity Prices and Growth in Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 23-40, Summer.
When requesting a correction, please mention this item's handle: RePEc:bla:jeurec:v:14:y:2016:i:1:p:80-114. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.