SYSTEMIC AND IDIOSYNCRATIC SOVEREIGN DEBT CRISES
| Autor: | Graciela Kaminsky, Pablo Vega-Garcia |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
Rare disasters
05 social sciences 1. No poverty Financial system Monetary economics External debt Market liquidity Debt restructuring 0502 economics and business 8. Economic growth Economics Default Internal debt 050207 economics Debt levels and flows General Economics Econometrics and Finance 050205 econometrics European debt crisis |
| Zdroj: | Journal of the European Economic Association. 14:80-114 |
| ISSN: | 1542-4766 |
| DOI: | 10.1111/jeea.12165 |
| Popis: | 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. |
| Databáze: | OpenAIRE |
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