"Rules of thumb" for sovereign debt crises

Paolo Manasse and Nouriel Roubini

Journal of International Economics, 2009, vol. 78, issue 2, 192-205

Abstract: This paper investigates the economic and political conditions that are associated to the occurrence of a sovereign debt crisis. We use a new statistical approach (Classification and Regression Tree) that allows us to derive a collection of "rules of thumb" that help identify the typical characteristics of defaulters. We find that not all crises are equal: they differ depending on whether the government faces insolvency, illiquidity, or various macroeconomic risks. We also characterize the set of fundamentals that can be associated with a relatively "risk-free" zone. This classification is important for discussing appropriate policy options to prevent crises and improve response time and prediction.

Keywords: Sovereign; debt; Crises; Default (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (145)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022-1996(09)00044-0
Full text for ScienceDirect subscribers only

Related works:
Working Paper: “Rules of Thumb” for Sovereign Debt Crises (2005)
Working Paper: 'Rules of Thumb' for Sovereign Debt Crises (2005)
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:eee:inecon:v:78:y:2009:i:2:p:192-205

Access Statistics for this article

Journal of International Economics is currently edited by Martin Uribe and Costas Arkolakis

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().