I (Don't) Owe You: Sovereign Default and Borrowing Behavior

Dimitris Georgarakos and Alexander Popov

No 18300, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Using microdata from a U.S. household survey, we document that immigrants who lived through a sovereign default episode are 6\% less likely to hold debt relative to otherwise similar immigrants who reside in the same U.S. state and come from the same foreign country but who did not experience a default. Conditional on holding debt, consumers in the former group borrow less and service lower debt burdens. The negative effect on borrowing behavior of having experienced a sovereign default increases with family size and declines with education. These findings highlight the role of personal experience in shaping households' financial decisions.

Keywords: Sovereign; default (search for similar items in EconPapers)
JEL-codes: D83 G11 G51 H63 (search for similar items in EconPapers)
Date: 2023-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18300 (application/pdf)

Related works:
Working Paper: I (don’t) owe you: sovereign default and borrowing behavior (2024)
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:cpr:ceprdp:18300

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18300

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().