Domestic vs. External Sovereign Debt Servicing: An Empirical Analysis

Emanuel Kohlscheen

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper analyzes the incidence of domestic and external debt crises for a sample of 53 emerging economies between 1980 and 2005. Even though there is substantial time variation in the default rates during the period, sovereign default rates for domestic debts are typically lower than those for external debts. The incidence of both types of defaults is explained by means of the estimation of independent and simultaneous limited-dependent variable models. The results show that while there is considerable evidence that external defaults trigger domestic defaults, evidence for the reverse link disappears when default propensities are estimated in a simultaneous equation model.

Date: 2009
New Economics Papers: this item is included in nep-cba
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Domestic vs external sovereign debt servicing: an empirical analysis (2010)
Working Paper: Domestic vs. External Sovereign Debt Servicing: An Empirical Analysis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:904

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