Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten

Kenneth Rogoff and Carmen Reinhart

No 9445, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Even after one of the most severe multi-year crisis on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation or a combination of these were an integral part of the resolution of significant past debt overhangs.

Keywords: Capital controls; Debt; Default; Financial crisis (search for similar items in EconPapers)
JEL-codes: E2 E3 E6 F3 F4 H6 N10 (search for similar items in EconPapers)
Date: 2013-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP9445 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten (2015)
Working Paper: Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten (2013)
Working Paper: Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:9445

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP9445

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().