IDEAS home Printed from https://ideas.repec.org/a/pal/compes/v62y2020i4d10.1057_s41294-020-00124-1.html
   My bibliography  Save this article

An Analysis of Argentina’s 2001 Default Resolution

Author

Listed:
  • Martin Guzman

    (Columbia Business School
    University of Buenos Aires)

Abstract

Argentina’s 2001 default was followed by a complex debt restructuring that included a long legal dispute with so-called vulture funds and other holdout creditors. The resolution of the sovereign default took almost 15 years—and the case continues to have ramifications that are resulting in new disputes. This paper examines the whole restructuring process. It describes the strategies followed by the debtor and the bondholders, their implications, and the characteristics of the legal disputes. It also analyzes the implications of the default resolution for the functioning of sovereign lending markets.

Suggested Citation

  • Martin Guzman, 2020. "An Analysis of Argentina’s 2001 Default Resolution," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(4), pages 701-738, December.
    • Handle: RePEc:pal:compes:v:62:y:2020:i:4:d:10.1057_s41294-020-00124-1
    DOI: 10.1057/s41294-020-00124-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41294-020-00124-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41294-020-00124-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marcus Miller & Dania Thomas, 2007. "Sovereign Debt Restructuring: The Judge, the Vultures and Creditor Rights," The World Economy, Wiley Blackwell, vol. 30(10), pages 1491-1509, October.
    2. Sourbron Leentje Ann & Vereeck Lode, 2017. "To Pay or Not to Pay? Evaluating the Belgian Law Against Vulture Funds," Journal of Globalization and Development, De Gruyter, vol. 8(1), pages 1-14, June.
    3. Paul R. Krugman, 1988. "Market-Based Debt-Reduction Schemes," NBER Working Papers 2587, National Bureau of Economic Research, Inc.
    4. Amrita Dhillon & Javier García‐Fronti & Sayantan Ghosal & Marcus Miller, 2006. "Debt Restructuring and Economic Recovery: Analysing the Argentine Swap," The World Economy, Wiley Blackwell, vol. 29(4), pages 377-398, April.
    5. Mario Damill & Roberto Frenkel & Martín Rapetti, 2015. "Macroeconomic Policy in Argentina During 2002–2013," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(3), pages 369-400, September.
    6. Martin Guzman & Domenico Lombardi, 2018. "Assessing the Appropriate Size of Relief in Sovereign Debt Restructuring," Documentos de trabajo del Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET) 2018-26, Universidad de Buenos Aires, Facultad de Ciencias Económicas, Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET).
    7. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and Economic Performance, Volume 1: The International Financial System"," NBER Chapters, in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages 1-36, National Bureau of Economic Research, Inc.
    8. Schumacher, Julian & Trebesch, Christoph & Enderlein, Henrik, 2021. "Sovereign defaults in court," Journal of International Economics, Elsevier, vol. 131(C).
    9. 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.
    10. Arturo C. Porzecanski, 2005. "From Rogue Creditors to Rogue Debtors: Implications of Argentina's Default," International Finance 0510010, University Library of Munich, Germany.
    11. 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.
    12. Eduardo Borensztein & Paolo Mauro, 2004. "The case for GDP-indexed bonds [‘World income components: measuring and exploiting risk-sharing opportunities’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 19(38), pages 166-216.
    13. Mr. Jeromin Zettelmeyer & Mr. Federico Sturzenegger, 2005. "Haircuts: Estimating Investor Losses in Sovereign Debt Restructurings, 1998-2005," IMF Working Papers 2005/137, International Monetary Fund.
    14. Julian Schumacher, 2015. "Sovereign Debt Litigation in Argentina: Implications of the Pari Passu Default," Journal of Financial Regulation, Oxford University Press, vol. 1(1), pages 143-148.
    15. Jeffrey D. Sachs, 1989. "Conditionality, Debt Relief, and the Developing Country Debt Crisis," NBER Chapters, in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages 255-296, National Bureau of Economic Research, Inc.
    16. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters, in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12, National Bureau of Economic Research, Inc.
    17. Geanakoplos, John, 2014. "Leverage, Default, and Forgiveness: Lessons from the American and European Crises," Journal of Macroeconomics, Elsevier, vol. 39(PB), pages 313-333.
    18. Krugman, Paul, 1988. "Financing vs. forgiving a debt overhang," Journal of Development Economics, Elsevier, vol. 29(3), pages 253-268, November.
    19. Anna, Petrenko, 2016. "Мaркування готової продукції як складова частина інформаційного забезпечення маркетингової діяльності підприємств овочепродуктового підкомплексу," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 2(1), March.
    20. Jeffrey D. Sachs, 1989. "Conditionality, Debt Relief, and the Developing Country Debt Crisis," NBER Chapters, in: Developing Country Debt and the World Economy, pages 275-284, National Bureau of Economic Research, Inc.
    21. Olivier J. Blanchard & Paolo Mauro & Julien Acalin, 2016. "The Case for Growth-Indexed Bonds in Advanced Economies Today," Policy Briefs PB16-2, Peterson Institute for International Economics.
    22. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance, Volume 1: The International Financial System," NBER Books, National Bureau of Economic Research, Inc, number sach89-1, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sayantan Ghosal & Marcus Miller & Kannika Thampanishvong, 2019. "Waiting for a haircut? A bargaining perspective on sovereign debt restructuring," Oxford Economic Papers, Oxford University Press, vol. 71(2), pages 405-420.
    2. Martin Guzman & Domenico Lombardi, 2018. "Assessing the Appropriate Size of Relief in Sovereign Debt Restructuring," Documentos de trabajo del Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET) 2018-26, Universidad de Buenos Aires, Facultad de Ciencias Económicas, Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Guzman, 0. "An Analysis of Argentina’s 2001 Default Resolution," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 0, pages 1-38.
    2. Ferry, Marin & Raffinot, Marc & Venet, Baptiste, 2021. "Does debt relief “irresistibly attract banks as honey attracts bees”? Evidence from low-income countries’ debt relief programs," International Review of Law and Economics, Elsevier, vol. 66(C).
    3. Gonçalves, Carlos Eduardo & Guimaraes, Bernardo, 2015. "Sovereign default risk and commitment for fiscal adjustment," Journal of International Economics, Elsevier, vol. 95(1), pages 68-82.
    4. Josefin Meyer & Carmen M Reinhart & Christoph Trebesch, 2022. "Sovereign Bonds Since Waterloo," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(3), pages 1615-1680.
    5. Galli, Carlo, 2021. "Self-fulfilling debt crises, fiscal policy and investment," Journal of International Economics, Elsevier, vol. 131(C).
    6. Marin Ferry, 2019. "The carrot and stick approach to debt relief: overcoming moral hazard," Journal of African Economies, Centre for the Study of African Economies, vol. 28(3), pages 252-276.
    7. Eichengreen, Barry, 2015. "How the euro crisis ends: Not with a bang but a whimper," Journal of Policy Modeling, Elsevier, vol. 37(3), pages 415-422.
    8. Hasan Shahzad & Attiya Yasmin Javid, 2015. "Impact of Debt on Aggregate Investment and Productivity in Developing Asian Countries," PIDE-Working Papers 2015:127, Pakistan Institute of Development Economics.
    9. Marine De Talancé & Marin Ferry & Miguel Niño-Zarazùa, 2019. "Did Debt Relief Initiatives help to reach the MDGs? A Focus on Primary Education," Erudite Working Paper 2019-23, Erudite.
    10. Gatien Bon & Gong Cheng, 2021. "Understanding China's role in recent debt relief operations: A case study analysis," International Economics, CEPII research center, issue 166, pages 23-41.
    11. Guimarães, Bernardo de Vasconcellos & Ladeira, Carlos Eduardo de Almeida, 2015. "The determinants of IMF fiscal conditionalities: economics or politics?," Textos para discussão 391, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    12. Chuck Fang & Julian Schumacher & Christoph Trebesch, 2021. "Restructuring Sovereign Bonds: Holdouts, Haircuts and the Effectiveness of CACs," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(1), pages 155-196, March.
    13. Gatien Bon & Gong Cheng, 2020. "China’s overseas Sovereign debt relief actions: What insights do recent cases provide?," EconomiX Working Papers 2020-22, University of Paris Nanterre, EconomiX.
    14. Barry Eichengreen & Ugo Panizza, 2016. "A surplus of ambition: can Europe rely on large primary surpluses to solve its debt problem?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 31(85), pages 5-49.
    15. Spiros Bougheas & Indraneel Dasgupta & Oliver Morrissey, 2011. "Repayment versus Investment Conditions and Exclusivity in Lending Contracts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(2), pages 247-265, June.
    16. Bhattacharya, Rina, 1997. "Pace, sequencing and credibility of structural reforms," World Development, Elsevier, vol. 25(7), pages 1045-1061, July.
    17. Howard Haughton & Jodie Keane, 2021. "Alleviating debt distress and advancing the sustainable development goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(3), pages 528-536, May.
    18. Ferry, Marin & de Talancé, Marine & Niño-Zarazúa, Miguel, 2022. "Less debt, more schooling? Evidence from cross-country micro data," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 153-173.
    19. Siebert, Horst, 1990. "Wege aus der Verschuldungskrise," Kiel Working Papers 435, Kiel Institute for the World Economy (IfW Kiel).
    20. Christoph Trebesch & Mr. Michael G. Papaioannou & Mr. Udaibir S Das, 2012. "Sovereign Debt Restructurings 1950-2010: Literature Survey, Data, and Stylized Facts," IMF Working Papers 2012/203, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:compes:v:62:y:2020:i:4:d:10.1057_s41294-020-00124-1. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.