How Do Real Exchange Rates Vary in Hard and Soft Sovereign Defaults?

Brandon Fuller, Grey Gordon and Pablo Guerron

Richmond Fed Economic Brief, 2022, vol. 22, issue 40

Abstract: Sovereign defaults differ tremendously in creditor losses. Existing research has established that hard defaults (large creditor loss defaults) are associated with worse outcomes for GDP per capita than soft defaults. In this article, we document that hard defaults also feature worse real exchange rate depreciations.

Keywords: exchange rates; sovereign defaults; GDP; hard default; soft default (search for similar items in EconPapers)
Date: 2022
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