How Costly are Debt Crises?
30 Pages Posted: 12 Dec 2011
There are 2 versions of this paper
How Costly are Debt Crises?
Date Written: December 2011
Abstract
The aim of this paper is to assess the short- and medium-term impact of debt crises on GDP. Using an unbalanced panel of 154 countries from 1970 to 2008, the paper shows that debt crises produce significant and long-lasting output losses, reducing output by about 10 percent after eight years. The results also suggest that debt crises tend to be more detrimental than banking and currency crises. The significance of the results is robust to different specifications, identification and endogeneity checks, and datasets.
Keywords: Cross country analysis, Economic models, Financial crisis, Gross domestic product, Sovereign debt
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Carmen Reinhart, Kenneth Rogoff, ...
-
International Institutions for Reducing Global Financial Instability
-
By Jonathan Eaton and Raquel Fernández
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
Can Output Losses Following International Financial Crises Be Avoided?
-
Defaultable Debt, Interest Rates and the Current Account
By Mark Aguiar and Gita Gopinath
-
Defaultable Debt, Interest Rates, and the Current Account
By Mark Aguiar and Gita Gopinath
-
Have Commercial Banks Ignored History?
By Sule Ozler