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Sovereign Debt in the Americas: New Data and Stylized Facts

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Listed:
  • Kevin Cowan
  • Eduardo Levy-Yeyati
  • Ugo Panizza
  • Federico Sturzenegger

Abstract

In this paper, we introduce the first comprehensive database on sovereign debt systematically compiled to ensure comparability, for all countries in the Americas, and use this new data to highlight the main stylized facts regarding sovereign debt for developing America in the last two decades. We find that debt ratios in developing America are comparable to those in developed countries and have remained stable since the late nineties. By contrast, the composition of debt in the region has changed significantly, shifting from foreign currency external to local currency domestic debt. This “onshoring” and “ dedollarization” of sovereign debt, contrary to conventional wisdom, has not come at the expense of a shortening of maturities. Furthermore, we find that “onshoring” is correlated with the level economic development and country size, and with the presence of institutional investors.

Suggested Citation

  • Kevin Cowan & Eduardo Levy-Yeyati & Ugo Panizza & Federico Sturzenegger, 2006. "Sovereign Debt in the Americas: New Data and Stylized Facts," Working Papers Central Bank of Chile 371, Central Bank of Chile.
  • Handle: RePEc:chb:bcchwp:371
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    References listed on IDEAS

    as
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    Cited by:

    1. Levy-Yeyati, Eduardo & Sturzenegger, Federico, 2007. "A Balance-Sheet Approach to Fiscal Sustainability," Working Paper Series rwp07-044, Harvard University, John F. Kennedy School of Government.
    2. Mehl, Arnaud & Reynaud, Julien, 2010. "Risky public domestic debt composition in emerging economies," Journal of International Money and Finance, Elsevier, vol. 29(1), pages 1-18, February.
    3. Salvatore Dell’Erba & Ricardo Hausmann & Ugo Panizza, 2013. "Debt levels, debt composition, and sovereign spreads in emerging and advanced economies," Oxford Review of Economic Policy, Oxford University Press, pages 518-547.
    4. Arnaud Mehl & Julien Reynaud, 2008. "Domestic debt structures in emerging markets : new empirical evidence," Documents de travail du Centre d'Economie de la Sorbonne bla08059, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    5. Ugo Panizza & Andrea F. Presbitero, 2013. "Public Debt and Economic Growth in Advanced Economies: A Survey," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 149(II), pages 175-204, June.
    6. Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "The Forgotten History of Domestic Debt," Economic Journal, Royal Economic Society, vol. 121(552), pages 319-350, May.
    7. Hausmann Ricardo & Panizza Ugo, 2011. "Redemption or Abstinence? Original Sin, Currency Mismatches and Counter Cyclical Policies in the New Millennium," Journal of Globalization and Development, De Gruyter, pages 1-35.
    8. Avellaneda-Kantt, Maria Belen, 2012. "Perspectiva Macroeconomica y Tendencias en el Mercado de Deuda Latinoamericano: ¿El viraje hacia instrumentos de Fondeo Domesticos?
      [Macroeconomic Outlook and Trends in Latin American Debt Capital
      ," MPRA Paper 44271, University Library of Munich, Germany, revised 16 Jan 2013.
    9. S M Ali Abbas & Nazim Belhocine & Asmaa El-Ganainy & Mark Horton, 2011. "Historical Patterns and Dynamics of Public Debt—Evidence From a New Database," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(4), pages 717-742, November.
    10. Levy Yeyati, Eduardo, 2008. "The cost of reserves," Economics Letters, Elsevier, vol. 100(1), pages 39-42, July.
    11. Eduardo Levy Yeyati & Tomas Williams, 2014. "Financial Globalization in Emerging Economies: Much Ado About Nothing?," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Spring 20), pages 91-131, January.
    12. Sebastian M. Saiegh, 2009. "Coalition Governments And Sovereign Debt Crises," Economics and Politics, Wiley Blackwell, vol. 21(2), pages 232-254, July.
    13. Allegret, Jean-Pierre & Sand-Zantman, Alain, 2009. "Does a Monetary Union protect against external shocks?: An assessment of Latin American integration," Journal of Policy Modeling, Elsevier, vol. 31(1), pages 102-118.
    14. Emanuel Kohlscheen, 2010. "Domestic vs external sovereign debt servicing: an empirical analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 15(1), pages 93-103.
    15. Andrew Powell & Juan F. Martinez S., 2008. "Sobre los diferenciales y clasificaciones soberanos de economías emergentes," Research Department Publications 4566, Inter-American Development Bank, Research Department.
    16. repec:hal:journl:halshs-00332049 is not listed on IDEAS
    17. Andrea F. Presbitero, 2012. "Domestic debt in Low-Income Countries," Economics Bulletin, AccessEcon, vol. 32(2), pages 1099-1112.
    18. Daniel Fried, 2017. "Inflation, Default, and the Currency Composition of Sovereign Debt in Emerging Economies: Working Paper 2017-01," Working Papers 52385, Congressional Budget Office.
    19. Alberto Chong & Mark Gradstein, 2008. "Who Needs Strong Leaders?," Research Department Publications 4563, Inter-American Development Bank, Research Department.
    20. Paloma Acevedo & Enrique Alberola & Carmen Broto, 2008. "Local debt expansion and vulnerability reduction: an assessment for six crisis-prone countries," BIS Papers chapters,in: Bank for International Settlements (ed.), New financing trends in Latin America: a bumpy road towards stability, volume 36, pages 88-109 Bank for International Settlements.
    21. Ağca, Şenay & Celasun, Oya, 2012. "Sovereign debt and corporate borrowing costs in emerging markets," Journal of International Economics, Elsevier, vol. 88(1), pages 198-208.
    22. Andrew Powell & Juan Francisco Martínez, 2008. "On Emerging Economy Sovereign Spreads and Ratings," IDB Publications (Working Papers) 1611, Inter-American Development Bank.
    23. Colliac, Stéphane & Lapteacru, Ion, 2008. "Three countries' debt profiles: Average maturities in Mexico, Brazil, and Russia," Journal of Multinational Financial Management, Elsevier, vol. 18(2), pages 94-111, April.
    24. Forslund, Kristine & Lima, Lycia & Panizza, Ugo, 2011. "The determinants of the composition of public debt in developing and emerging market countries," POLIS Working Papers 156, Institute of Public Policy and Public Choice - POLIS.

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