Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten
Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is pre...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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University of Warsaw
2015-08-01
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| Series: | Journal of Banking and Financial Economics |
| Subjects: | |
| Online Access: | https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198260 |
| _version_ | 1797226861292421120 |
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| author | Carmen M. Reinhart Kenneth S. Rogoff |
| author_facet | Carmen M. Reinhart Kenneth S. Rogoff |
| author_sort | Carmen M. Reinhart |
| collection | DOAJ |
| description | Even after one of the most severe multi-year crises on record in the advanced economies, the
received wisdom in policy circles clings to the notion that high-income countries are completely
different from their emerging market counterparts. The current phase of the official policy
approach is predicated on the assumption that debt sustainability can be achieved through a mix
of austerity, forbearance and growth. The claim is that advanced countries do not need to resort
to the standard toolkit of emerging markets, including debt restructurings and conversions, higher
inflation, capital controls and other forms of financial repression. As we document, this claim is
at odds with the historical track record of most advanced economies, where debt restructuring or
conversions, financial repression, and a tolerance for higher inflation, or a combination of these
were an integral part of the resolution of significant past debt overhangs. |
| first_indexed | 2024-04-24T14:31:38Z |
| format | Article |
| id | doaj.art-e66e700976314b97bb10ed613134ffc7 |
| institution | Directory Open Access Journal |
| issn | 2353-6845 |
| language | English |
| last_indexed | 2024-04-24T14:31:38Z |
| publishDate | 2015-08-01 |
| publisher | University of Warsaw |
| record_format | Article |
| series | Journal of Banking and Financial Economics |
| spelling | doaj.art-e66e700976314b97bb10ed613134ffc72024-04-03T02:54:34ZengUniversity of WarsawJournal of Banking and Financial Economics2353-68452015-08-0120152(4)51710.7172/2353-6845.jbfe.2015.2.1Financial and Sovereign Debt Crises: Some Lessons Learned and Those ForgottenCarmen M. Reinhart0Kenneth S. Rogoff1Kennedy School of Government, Harvard University, U.S.A.Department of Economics, Harvard University, U.S.A.Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198260financial crisessovereign debt crisesdeleveragingcredit cyclesfinancial repressiondebt restructuringdebt forgivenesscapital controlsausterity |
| spellingShingle | Carmen M. Reinhart Kenneth S. Rogoff Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten Journal of Banking and Financial Economics financial crises sovereign debt crises deleveraging credit cycles financial repression debt restructuring debt forgiveness capital controls austerity |
| title | Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten |
| title_full | Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten |
| title_fullStr | Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten |
| title_full_unstemmed | Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten |
| title_short | Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten |
| title_sort | financial and sovereign debt crises some lessons learned and those forgotten |
| topic | financial crises sovereign debt crises deleveraging credit cycles financial repression debt restructuring debt forgiveness capital controls austerity |
| url | https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198260 |
| work_keys_str_mv | AT carmenmreinhart financialandsovereigndebtcrisessomelessonslearnedandthoseforgotten AT kennethsrogoff financialandsovereigndebtcrisessomelessonslearnedandthoseforgotten |