Sovereign Debt Defaults: Evidence using Extreme bounds Analysis

Hussein Zeaiter

No 32/2013, Working Papers from Universidade Portucalense, Centro de Investigação em Gestão e Economia (CIGE)

Abstract: This paper investigates the determinants of sovereign debt defaults using Extreme Bounds Analysis (EBA). The EBA approach is applied for 190 countries over the period 1970 2010 to determine whether economic and political factors are “robust” or “fragile”. This study finds that debt accumulated arrears can be perceived as an early signal for default and alarm countries to prevent total failure or at least alleviate the severity of the default. Also, this study recommends that the debtor country should (1) attract more foreign reserves through adjusting domestic policies and regulations of investment,(2) control debt by adopting a debt ratio ceiling, and (3) have proactive fiscal policies.

Keywords: sovereign debt; Extreme bounds analysis; panel data (search for similar items in EconPapers)
JEL-codes: F34 H63 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2013-05-27
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://siupt.uportu.pt/content/files/dcee/Investigacao/WP_32_2013.pdf Full text (application/pdf)

Related works:
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:ris:cigewp:2013_032

Access Statistics for this paper

More papers in Working Papers from Universidade Portucalense, Centro de Investigação em Gestão e Economia (CIGE) Universidade Portucalense – Economics and Management Department (CIGE – Centro de Investigação em Gestão e Economia), Rua Dr. António Bernardino de Almeida, 541-619, 4200 – 072 Porto, Portugal. Contact information at EDIRC.
Bibliographic data for series maintained by Luis Pacheco ( this e-mail address is bad, please contact ).