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The Hausmann–Gorky Effect


  • Mitu Gulati

    (Duke University)

  • Ugo Panizza

    (The Graduate Institute)


On May 26, 2017, Harvard economist Ricardo Hausmann published an Op Ed titled “Hunger Bonds”, urging investors to avoid Venezuelan sovereign bonds on the grounds that the country was prioritizing payments on the bonds over remedying a humanitarian crisis. Contemporaneously, news emerged regarding a suspicious looking bond issue by Venezuela’s oil company that was purchased largely by Goldman Sachs. That bond got tagged with the label “Hunger Bond”, and suffered a price hit. Using both quantitative data and interviews with investors, we examine the causes of the Hunger Bond penalty, its impact on the prices of other outstanding Venezuelan bonds, and how long it was sustained. The primary determinants of the Hunger Bond penalty appear to have been a combination of negative press attention and crowd-sourced disapproval. For instance, we show that a large number of Google searches for “Hunger Bonds” are associated with a 200 basis point increase in the spread of the bond purchased by Goldman Sachs.

Suggested Citation

  • Mitu Gulati & Ugo Panizza, 2020. "The Hausmann–Gorky Effect," Journal of Business Ethics, Springer, vol. 166(1), pages 175-195, September.
  • Handle: RePEc:kap:jbuset:v:166:y:2020:i:1:d:10.1007_s10551-019-04132-9
    DOI: 10.1007/s10551-019-04132-9

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    References listed on IDEAS

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    Cited by:

    1. Nicolas Degive & Kim Oosterlinck, 2019. "Independence and the Effect of Empire The Case of “Sovereign Debts” issued by British Colonies," Working Papers CEB 19-018, ULB -- Universite Libre de Bruxelles.
    2. Chih-peng Wang & Ban-jwu Shih & Min-cheng Tu, 2022. "Study on the improvement of disaster resistance against tsunamis at Taiwan’s Keelung Port," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 110(3), pages 1507-1526, February.

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    More about this item


    Odious debt; Sovereign finance; Venezuela;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean


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