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Heading into Trouble: A Comparison of the Latin American Crises and the Euro Area's Current Crisis

Manuel Ramos Francia, Aguilar-Argaez Ana María, Santiago Garcia-Verdu and Gabriel Cuadra

No 2014-17, Working Papers from Banco de México

Abstract: We compare the experience of Latin American external debt crises, in particular the one in the 80s, with the current European one. We do so with the aim of shedding some light on the needed adjustment mechanisms. We argue for the need of much larger debt relief in Europe. To address the moral hazard problems that would arise, we propose providing such relief conditional on the reduction of both the fiscal and the current account deficits to zero as a commitment signal.

Keywords: Sovereign Debt; Debt Crisis; Crisis Management (search for similar items in EconPapers)
JEL-codes: F34 H12 H63 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-cba, nep-eec and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Heading into Trouble: A Comparison of the Latin American Crises and the Euro Area’s Current Crisis (2013) Downloads
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