EconPapers    
Economics at your fingertips  
 

Systemic and Idiosyncratic Sovereign Debt Crises

Graciela Kaminsky () and Pablo Vega-García

Journal of the European Economic Association, 2016, vol. 14, issue 1, 80-114

Abstract: The theoretical literature on sovereign defaults has focused on adverse shocks to debtors' economies, suggesting that defaults are of an idiosyncratic nature. Still, sovereign debt crises are also of a systemic nature, clustered around panics in the financial center, such as the European Sovereign Debt Crisis in the aftermath of the US Subprime Crisis in 2008. Crises in the financial centers are rare disasters and, thus, their effects on the periphery can only be captured by examining long episodes. In this paper, we examine sovereign defaults from 1820 to the Great Depression, with a focus on Latin America. We find that 63% of the crises are of a systemic nature. These crises are different. Both the international collapse of liquidity and the growth slowdown in the financial centers are at their core. These global shocks trigger longer default spells and larger losses for investors.

JEL-codes: F30 F34 F65 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://hdl.handle.net/10.1111/jeea.12165 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Journal Article: SYSTEMIC AND IDIOSYNCRATIC SOVEREIGN DEBT CRISES (2016) Downloads
Working Paper: Systemic and Idiosyncratic Sovereign Debt Crises (2015) Downloads
Working Paper: Systemic and Idiosyncratic Sovereign Debt Crises (2014) Downloads
Chapter: Systemic and Idiosyncratic Sovereign Debt Crises (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:oup:jeurec:v:14:y:2016:i:1:p:80-114.

Access Statistics for this article

Journal of the European Economic Association is currently edited by Romain Wacziarg

More articles in Journal of the European Economic Association from European Economic Association
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2025-03-19
Handle: RePEc:oup:jeurec:v:14:y:2016:i:1:p:80-114.