Systemic and Idiosyncratic Sovereign Debt Crises
The theoretical literature on sovereign defaults has focused on adverse shocks to debtors’ economies, suggesting that defaults are of an idiosyncratic nature. Still, sovereign debt crises are also of a systemic nature, clustered around panics in the financial center such as the European Sovereign Debt Crisis in the aftermath of the U.S. Subprime Crisis in 2008. Crises in the financial centers are rare disasters and thus, their effects on the periphery can only be captured by examining long episodes. This paper examines sovereign defaults from 1820 to the Great Depression, with a focus on Latin America. We find that 63% of the crises are of a systemic nature. These crises are different. Both the international collapse of liquidity and the growth slowdown in the financial centers are at their core. These global shocks trigger longer default spells and larger investors’ losses.
|Date of creation:||Apr 2014|
|Date of revision:|
|Publication status:||published as Systemic and Idiosyncratic Sovereign Debt Crises , Graciela Laura Kaminsky, Pablo Vega-García. in Sovereign Debt and Financial Crises , Kalemli-Ozcan, Reinhart, and Rogoff. 2016|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Mark Aguiar & Gita Gopinath, 2004.
"Defaultable debt, interest rates and the current account,"
Federal Reserve Bank of San Francisco, issue Jun.
- Aguiar, Mark & Gopinath, Gita, 2006. "Defaultable debt, interest rates and the current account," Journal of International Economics, Elsevier, vol. 69(1), pages 64-83, June.
- Mark Aguiar & Gita Gopinath, 2004. "Defaultable debt, interest rates, and the current account," Working Papers 04-5, Federal Reserve Bank of Boston.
- Mark Aguiar & Gita Gopinath, 2004. "Defaultable Debt, Interest Rates and the Current Account," NBER Working Papers 10731, National Bureau of Economic Research, Inc.
- Julie Kozack, 2005. "Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings," IMF Policy Discussion Papers 05/09, International Monetary Fund.
- Cristina Arellano, 2008.
"Default Risk and Income Fluctuations in Emerging Economies,"
American Economic Review,
American Economic Association, vol. 98(3), pages 690-712, June.
- Arellano, Cristina, 2008. "Default risk and income fluctuations in emerging economies," MPRA Paper 7867, University Library of Munich, Germany.
- Yael S. Hadass & Jeffrey G. Williamson, 2001.
"Terms of Trade Shocks and Economic Performance 1870-1940: Prebisch and Singer Revisited,"
NBER Working Papers
8188, National Bureau of Economic Research, Inc.
- Hadass, Yael S & Williamson, Jeffrey G, 2003. "Terms-of-Trade Shocks and Economic Performance, 1870-1940: Prebisch and Singer Revisited," Economic Development and Cultural Change, University of Chicago Press, vol. 51(3), pages 629-56, April.
- Márcio Gomes Pinto Garcia & Roberto Rigobon, 2004.
"A Risk Management Approach to Emerging Market’s Sovereign Debt Sustainability with an Application to Brazilian Data,"
Textos para discussão
484, Department of Economics PUC-Rio (Brazil).
- Marcio Garcia & Roberto Rigobon, 2004. "A Risk Management Approach to Emerging Market's Sovereign Debt Sustainability with an Application to Brazilian Data," NBER Working Papers 10336, National Bureau of Economic Research, Inc.
- Yue, Vivian Z., 2010.
"Sovereign default and debt renegotiation,"
Journal of International Economics,
Elsevier, vol. 80(2), pages 176-187, March.
- Angus Deaton, 1999.
"Commodity Prices and Growth in Africa,"
Journal of Economic Perspectives,
American Economic Association, vol. 13(3), pages 23-40, Summer.
- AfDB AfDB, . "AfDB Group Annual Report 2006," Annual Report, African Development Bank, number 62 edited by Koua Louis Kouakou.
- Jose Antonio Ocampo & Maria Angela Parra, 2004. "The Terms Of Trade For Commodities In The Twentieth Century," International Trade 0402006, EconWPA.
- Renee Fry & Callum Jones & Christopher Kent, 2010. "Inflation in an Era of Relative Pirce Shocks," CAMA Working Papers 2010-38, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Natalia Kovrijnykh & BalÃ¡zs Szentes, 2007. "Equilibrium Default Cycles," Journal of Political Economy, University of Chicago Press, vol. 115, pages 403-446.
- Roberto Rigobon & Marcio Garcia, 2004. "A Risk Management Approach to Emerging Marketâ€™s Sovereign Debt Sustainability with an application to Brazilian data," Econometric Society 2004 Latin American Meetings 24, Econometric Society.
- World Bank, 2007. "The World Bank Annual Report 2007," World Bank Publications, The World Bank, number 7534, January.
- 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.
- Juan J. Cruces & Christoph Trebesch, 2011. "Sovereign Defaults: The Price of Haircuts," CESifo Working Paper Series 3604, CESifo Group Munich.
- Cruces, Juan J. & Trebesch, Christoph, 2013. "Sovereign defaults: The price of haircuts," Munich Reprints in Economics 20036, University of Munich, Department of Economics.
- David Benjamin & Mark L. J. Wright, 2009. "Recovery Before Redemption: A Theory Of Delays In Sovereign Debt Renegotiations," CAMA Working Papers 2009-15, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Juan Braun-Llona & Matías Braun-Llona & Ignacio Briones & José Díaz & Rolf Lüders & Gert Wagner, . "Economía Chilena 1810-1995. Estadísticas Históricas," Documentos de Trabajo 187, Instituto de Economia. Pontificia Universidad Católica de Chile..
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:20042. 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: ()
If references are entirely missing, you can add them using this form.