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Sovereign Debt and Supersanctions in Emerging Markets: Evidence from Four Southeast European Countries, 1878-1913

Author

Listed:
  • Andreea-Alexandra Maerean

    (European Commission (DG Economic and Financial Affairs))

  • Maja Pedersen

    (University of Southern Denmark)

  • Paul Sharp

    (University of Southern Denmark)

Abstract

Do emerging markets need to sacrifice economic sovereignty in order to borrow more cheaply on the international capital markets? To explore this, we exploit a natural experiment following the Treaty of Berlin in 1878 when four Balkan states - Bulgaria, Greece, Romania, and Serbia - received full or de facto independence. Using a novel dataset of monthly bond prices from the Berlin and London stock exchanges, we find that a sacrifice of national sovereignty or ‘supersanctions’ was one way for these emerging markets to receive more favourable borrowing conditions. Romania never submitted to such measures, however, but was usually able to borrow more cheaply than her neighbours.

Suggested Citation

  • Andreea-Alexandra Maerean & Maja Pedersen & Paul Sharp, 2021. "Sovereign Debt and Supersanctions in Emerging Markets: Evidence from Four Southeast European Countries, 1878-1913," Working Papers 0216, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0216
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    More about this item

    Keywords

    Bulgaria; creditworthiness; emerging markets; Greece; Romania; Serbia; sovereign debt;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G1 - Financial Economics - - General Financial Markets
    • N2 - Economic History - - Financial Markets and Institutions

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