EconPapers    
Economics at your fingertips  
 

Sovereign Defaults and The Political Economy Of Market Reaccess

Mauro Alessandro, Guido Sandleris and Alejandro Van der Ghote

Business School Working Papers from Universidad Torcuato Di Tella

Abstract: Following a sovereign default, governments are usually unable to borrow from international credit markets for some time. The period of "exclusion" has varied from more than twenty years following some default events to less than a year in others. Using a unique dataset on sovereign bond issuances and syndicated bank loans between 1980 and 2000, this paper studies empirically the determinants of the duration of exclusion following a sovereign default and presents a DSGE model of endogeneous sovereign borrowing that rationalizes our key empirical findings. In particular, we find that countries either reaccess the markets in the first years after a default or have to wait a much longer time to do it. We also find that political stability significantly increases the chances of reaccessing the market in any given period after the default. Our political economy model of market reaccess can match hese two features of the data.

Pages: 32 pages
Date: 2011
New Economics Papers: this item is included in nep-dge and nep-pol
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.utdt.edu/download.php?fname=_131593844441542900.pdf (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:udt:wpbsdt:2011-08

Access Statistics for this paper

More papers in Business School Working Papers from Universidad Torcuato Di Tella Contact information at EDIRC.
Bibliographic data for series maintained by Nicolás Del Ponte ().

 
Page updated 2022-12-01
Handle: RePEc:udt:wpbsdt:2011-08