How costly are debt crises?

Davide Furceri and Aleksandra Zdzienicka ()

Journal of International Money and Finance, 2012, vol. 31, issue 4, 726-742

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 8 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: Output losses; Debt crises; Sovereign defaults (search for similar items in EconPapers)
JEL-codes: E6 G1 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (91)

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Related works:
Working Paper: How Costly Are Debt Crises? (2011)
Working Paper: How costly are debt crises? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:31:y:2012:i:4:p:726-742

DOI: 10.1016/j.jimonfin.2012.01.012

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