Carmen Reinhart (),
Kenneth Rogoff () and
MPRA Paper from University Library of Munich, Germany
This paper introduces the concept of “debt intolerance,” which manifests itself in the extreme duress many emerging markets experience at debt levels that would seem manageable by advanced country standards. We argue that “safe” external debt-to-GNP thresholds for debt intolerant countries are low, perhaps as low as 15 percent in some cases. These thresholds depend on a country’s default and inflation history. Debt intolerance is linked to the phenomenon of serial default that has plagued many countries over the past two centuries. Understanding and measuring debt intolerance is fundamental to assess the problems of debt sustainability, debt restructuring, capital market integration, and the scope for international lending to ameliorate crises. Our goal is to make a first pass at quantifying debt intolerance, including delineating debtors’ clubs and regions of vulnerability, on the basis on a history of credit events going back to the 1820s for over 100 countries.
Keywords: debt; credibility; credit; risk; default; domestic; debt; dollarization; sustainable (search for similar items in EconPapers)
JEL-codes: F34 F32 N20 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (352) Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/13932/1/MPRA_paper_13932.pdf original version (application/pdf)
Working Paper: Debt intolerance: Executive summary (2004)
Journal Article: Debt Intolerance (2003)
Working Paper: Debt Intolerance (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13932
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Series data maintained by Joachim Winter ().