External and Public Debt Crises

Cristina Arellano, Andrew Atkeson and Mark Wright

No 21456, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The recent debt crises in Europe and the U.S. states feature similar sharp increases in spreads on government debt but also show important differences. In Europe, the crisis occurred at high government indebtedness levels and had spillovers to the private sector. In the United States, state government indebtedness was low, and the crisis had no spillovers to the private sector. We show theoretically and empirically that these different debt experiences result from the interplay between differences in the ability of governments to interfere in private external debt contracts and differences in the flexibility of state fiscal institutions.

JEL-codes: F3 H7 K1 (search for similar items in EconPapers)
Date: 2015-08
Note: EFG IFM PE
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Citations: View citations in EconPapers (10)

Published as External and Public Debt Crises , Cristina Arellano, Andrew Atkeson, Mark Wright. in NBER Macroeconomics Annual 2015, Volume 30 , Eichenbaum and Parker. 2016

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Related works:
Chapter: External and Public Debt Crises (2015)
Working Paper: External and Public Debt Crises (2015)
Working Paper: External and Public Debt Crises (2015)
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