The seven mechanisms for achieving sovereign debt sustainability
Sovereign debt crises are harmful reoccurring economic phenomena and the subject of how best to achieve sovereign debt sustainability is therefore of paramount importance. For decades economists have struggled to find a robust and consistent means of assessing sovereign debt sustainability. This paper argues that our understanding of sovereign debt sustainability can be enhanced by viewing this subject through the dual lenses of political economy and economic history. These two perspectives help identify seven distinct mechanisms for achieving sovereign debt sustainability. It is important to understand each of these methods as countries can, and often do, pursue multiple strategies in their efforts to achieve debt sustainability. Sovereign debt sustainability is often as much a political as an economic challenge with competing internal and external dimensions.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0) 20 7955 7084
Web page: http://www.lse.ac.uk/economicHistory/
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.:
- Thomas J. Sargent, 1982.
"The Ends of Four Big Inflations,"
in: Inflation: Causes and Effects, pages 41-98
National Bureau of Economic Research, Inc.
- Nouriel Roubini & Xavier Sala-i-Martin, 1991.
"Financial Repression and Economic Growth,"
NBER Working Papers
3876, National Bureau of Economic Research, Inc.
- Paul R. Krugman, 1988.
"Financing vs. Forgiving a Debt Overhang,"
NBER Working Papers
2486, National Bureau of Economic Research, Inc.
- de la Torre, Augusto & Gozzi, Juan Carlos & Schmukler, Sergio L., 2007. "Innovative experiences in access to finance : market friendly roles for the visible hand ?," Policy Research Working Paper Series 4326, The World Bank.
- Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
- Giovannini, Alberto & de Melo, Martha, 1993. "Government Revenue from Financial Repression," American Economic Review, American Economic Association, vol. 83(4), pages 953-63, September.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Reinhart, Carmen M. & Rogoff, Kenneth, 2011.
"A Decade of Debt,"
CEPR Discussion Papers
8310, C.E.P.R. Discussion Papers.
- Reinhart, Carmen M. & Rogoff, Kenneth S., 2010.
"Growth in a Time of Debt,"
11129154, Harvard University Department of Economics.
- Cole, Harold L & Dow, James & English, William B, 1995.
"Default, Settlement, and Signalling: Lending Resumption in a Reputational Model of Sovereign Debt,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 365-85, May.
- Harold L. Cole & James Dow & William B. English, 1994. "Default, settlement, and signalling: lending resumption in a reputational model of sovereign debt," Staff Report 180, Federal Reserve Bank of Minneapolis.
- Porzecanski, Arturo C., 2010. "Should Argentina Be Welcomed Back by the Capital Markets?," MPRA Paper 27536, University Library of Munich, Germany.
- Eaton, Jonathan & Gersovitz, Mark & Stiglitz, Joseph E., 1986.
"The pure theory of country risk,"
European Economic Review,
Elsevier, vol. 30(3), pages 481-513, June.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2008.
"The Forgotten History of Domestic Debt,"
NBER Working Papers
13946, National Bureau of Economic Research, Inc.
- Carmen M. Reinhart & M. Belen Sbrancia, 2011.
"The Liquidation of Government Debt,"
BIS Working Papers
363, Bank for International Settlements.
- Carmen M. & M. Belen Sbrancia, 2011. "The Liquidation of Government Debt," Working Paper Series WP11-10, Peterson Institute for International Economics.
- Carmen Reinhart & M. Belen Sbrancia, 2015. "The Liquidation of Government Debt," IMF Working Papers 15/7, International Monetary Fund.
- Carmen M. Reinhart & M. Belen Sbrancia, 2011. "The Liquidation of Government Debt," NBER Working Papers 16893, National Bureau of Economic Research, Inc.
- Herschel I. Grossman & John B. Van Huyck, 1985.
"Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation,"
NBER Working Papers
1673, National Bureau of Economic Research, Inc.
- Grossman, Herschel I & Van Huyck, John B, 1988. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," American Economic Review, American Economic Association, vol. 78(5), pages 1088-97, December.
- Ritschl, Albrecht, 1996. "Sustainability of High Public Debt: What the Historical Record Shows," CEPR Discussion Papers 1357, C.E.P.R. Discussion Papers.
- Reinhart, Carmen & Rogoff, Kenneth & Savastano, Miguel, 2003.
13932, University Library of Munich, Germany.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973, April.
- Easterly, William & DEC, 1993.
"How much do distortions affect growth?,"
Policy Research Working Paper Series
1215, The World Bank.
- G. A. Mackenzie, 1998. "The Macroeconomic Impact of Privatization," IMF Staff Papers, Palgrave Macmillan, vol. 45(2), pages 363-373, June.
- Eaton, Jonathan & Gersovitz, Mark, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Wiley Blackwell, vol. 48(2), pages 289-309, April.
- Stephen Cecchetti & Madhusudan Mohanty & Fabrizio Zampolli, 2010. "The future of public debt: prospects and implications," BIS Working Papers 300, Bank for International Settlements.
When requesting a correction, please mention this item's handle: RePEc:ehl:wpaper:42878. 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: (LSERO Manager on behalf of EH Dept.)
If references are entirely missing, you can add them using this form.