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Sovereign debt guarantees and default: Lessons from the UK and Ireland, 1920-1938

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  • Nathan Foley-Fisher

    (Research and Statistics Division, Federal Reserve Board, Washington, D.C., USA)

  • Eoin McLaughlin

    (Department of Geography and Sustainable Development, University of St. Andrews)

Abstract

We study the daily yields on Irish land bonds listed on the Dublin Stock Exchange during the years 1920-1938. We exploit structural differences in bonds guaranteed by the UK and Irish governments to find Irish events that had long term effects on the credibility of government guarantees. We document two major events: The Anglo-Irish Treaty of 1921 and Ireland’s default on intergovernmental payments in 1932. We discuss the political and economic forces behind the Irish and UK governments’ decisions. Our finding has implications for modern-day proposals to issue jointly-guaranteed sovereign debt.

Suggested Citation

  • Nathan Foley-Fisher & Eoin McLaughlin, 2015. "Sovereign debt guarantees and default: Lessons from the UK and Ireland, 1920-1938," Discussion Papers in Environment and Development Economics 2015-11, University of St. Andrews, School of Geography and Sustainable Development.
    • Handle: RePEc:sss:wpaper:2015-11
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Who Pays the Bills?
      by bbatiz in NEP-HIS blog on 2015-08-18 22:44:26

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    Cited by:

    1. FitzGerald, John & Kenny, Seán, 2018. "Managing a Century of Debt," Lund Papers in Economic History 171, Lund University, Department of Economic History.
    2. Kenny, Seán & McLaughlin, Eoin, 2022. "Political Economy Of Secession: Lessons From The Early Years Of The Irish Free State," National Institute Economic Review, National Institute of Economic and Social Research, vol. 261, pages 48-78, August.
    3. McLaughlin, Darragh & McLaughlin, Eoin & Kenny, Seán, 2025. "Taking a punt: Monetary experimentation and the Irish macroeconomic crisis of 1955-56," Accountancy, Economics, and Finance Working Papers 2025-01, Heriot-Watt University, Department of Accountancy, Economics, and Finance.
    4. Kenny, Seán, 2024. "Irish GDP Since Independence," Lund Papers in Economic History 258, Lund University, Department of Economic History.
    5. Kenny, Sean, 2024. "Irish GDP since independence," QUCEH Working Paper Series 24-05, Queen's University Belfast, Queen's University Centre for Economic History.

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    More about this item

    Keywords

    Ireland; Irish land bonds; Dublin Stock Exchange; sovereign default; debt mutualization.;
    All these keywords.

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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