Yet it Endures: The Persistence of Original Sin

Barry Eichengreen, Ricardo Hausmann and Ugo Panizza

Open Economies Review, 2023, vol. 34, issue 1, No 1, 42 pages

Abstract: Abstract Notwithstanding announcements of progress, “international original sin” (the denomination of external debt in foreign currency) remains a persistent phenomenon in emerging markets. Although some middle-income countries have succeeded in developing markets in local-currency sovereign debt and attracting foreign investors, they continue to hedge their currency exposures through transactions with local pension funds and other resident investors. The result is to shift the locus of currency mismatches within emerging economies but not to eliminate them. Other countries have limited original sin by limiting external borrowing, passing up valuable investment opportunities in pursuit of stability. We document these trends, analyzing regional and global aggregates and national case studies. Our conclusion is that there remains a case for an international initiative to address currency risk in low- and middle-income economies so they can more fully exploit economic development opportunities.

Keywords: UC; Berkele (search for similar items in EconPapers)
JEL-codes: C82 F34 H63 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://link.springer.com/10.1007/s11079-022-09704-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Yet it Endures: The Persistence of Original Sin (2022)
Working Paper: Yet it Endures: The Persistence of Original Sin (2022)
Working Paper: Yet it Endures The Persistence of Original Sin (2022)
Working Paper: Yet it Endures: The Persistence of Original Sin (2022)
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:kap:openec:v:34:y:2023:i:1:d:10.1007_s11079-022-09704-3

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-022-09704-3

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().