IMF Staff Papers, Volume 56, No. 4

November 4, 2009

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IMF Staff Papers, Volume 56, No. 4, (USA: International Monetary Fund, 2009) accessed November 21, 2024

Summary

This paper empirically evaluates four types of costs that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.

Subject: Banking, Economic integration, External debt, Financial markets, Foreign exchange, Monetary unions, Production, Real effective exchange rates, Stock markets, Total factor productivity, Trade credits

Keywords: Africa, Baltics, Caribbean, Debt projection, Default episode, Global, Home terms of trade, Monetary unions, Productivity gain, Real effective exchange rates, Southeast Asia, SP, Stock markets, Terms-of-trade response, Terms-of-trade shock, Total factor productivity, Trade credits

Publication Details

Pages:

295
Volume:

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DOI:

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Issue:

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Series:

IMF Staff Papers No. 2009/004
Stock No:

SPIEA2009004
ISBN:

9781589069107
ISSN:

1020-7635

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