Description

This paper empirically evaluates four types of costs that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.

People who purchased this product also purchased

Annual Report on Exchange Arrangements and Exchange Restrictions 2009 ($230.00)

Direction of Trade Statistics Print Subscription ($247.00)

International Financial Statistics Monthly Print Subscription ($847.00)

More publications in this series: IMF Staff Papers / Economic Review