Debt restructuring and the rules of engineering
Incentivves to avoid delayed default
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Things I read and found interesting
“Our findings show that there can be “too much” finance. While [opponents of regulation like Alan] Greenspan argued that less credit may hurt our future standard of living, our results indicate that, in countries with very large financial sectors, regulatory policies that reduce the size of the financial sector may have a positive effect on economic growth.”
This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
Therefore, the total impact includes a journal's impact on many disciplines
other than economics. For many purposes this may be an entirely reasonable
measure of influence, but economists, being a rather narrow-minded and
self-centered group, are probably more concerned with a journal's impact on the
economics profession
issue makes me uncomfortable within myself, takes me off my high moral perch when I talk (or lecture) to others about poverty, and it is an issue for which I do not have an answer. It is quite simply this—those of us, including me, who analyze poverty and discourse about poverty, seem to do rather well out of it. Working on poverty issues, whether in international agencies, in bilateral donor
The global crisis is frequently compared to the Great Depression and the interwar debt crises. This column argues that, contrary to prevailing opinion, the interwar debt crisis had little to do with bankers’ conflicts of interest – intermediaries were in fact careful in selecting and placing sovereign bonds. Then, as now, public opinion may not be the best guide to policy The rest is here |
Eduardo Borensztein and Ugo Panizza counts as many as 257 sovereign defaults between 1824 and 2004. Between 1981 and 1990 alone, there were 74 defaults....Messrs Borensztein and Panizza show that having defaulted is associated with a credit-rating downgrade of nearly two notches.....That said, markets appear to have short memories. Only the most recent defaults matter and the effects on spreads are short-lived. Messrs Borensztein and Panizza find that credit ratings between 1999 and 2002 were affected only by defaults since 1995.....Messrs Borensztein and Panizza find that a defaulting country grows by 1.2 percentage points less per year while its debt is being restructured compared with a similar country that is not in default. This effect, too, is concentrated in the first year after default. Once again, measuring from the point of default will somewhat understate the damage: defaults tend to occur during recessions, so GDP is already depressed when a country reneges...Another element to the costs of default may also alarm Greek policymakers. Messrs Borensztein and Panizza find that political leadership changed in the year of default or the year after in half of the 22 cases they study. That is twice the usual probability of such change. These political costs, at least, are unlikely to vary.
I read a lot of stuff and I used to forward what I found interesting/fun to friends. Rather than emailing, I am posting the links here. In this “No Original Content” blog there is nothing of my own (at least for the moment), just a bunch of links (mostly in English but I will also try to add Italian/Spanish/French links).
I don’t think that I will express any views here (remember: “No Original Content”), but in case I were to express a view, this should be interpreted as my own view and not that of any institution I am or I have been affiliated with.
About me: My name is Ugo Panizza, my website is here.