This paper studies the relationship between sovereign debt default and annual GDP growth distinguishing between private and official deals. Using the Synthetic Control Method to analyze 23 official and private defaulters from 1970 to 2017, we find that private defaults generate output losses both during the crisis and persisting over time. Conversely, official defaulters do not show a permanent drop in GDP per capita, neither during the crisis nor in its aftermath. Using panel data analysis to control for the creditors’ loss (haircut), we confirm that official and private defaults may have different effects on GDP growth.

Marchesi, S., & Masi, T. (2021). Life after default: Private and Official deals. JOURNAL OF INTERNATIONAL MONEY AND FINANCE, 113(May) [10.1016/j.jimonfin.2020.102339].

Life after default: Private and Official deals

Marchesi, S
;
Masi, T
2021

Abstract

This paper studies the relationship between sovereign debt default and annual GDP growth distinguishing between private and official deals. Using the Synthetic Control Method to analyze 23 official and private defaulters from 1970 to 2017, we find that private defaults generate output losses both during the crisis and persisting over time. Conversely, official defaulters do not show a permanent drop in GDP per capita, neither during the crisis nor in its aftermath. Using panel data analysis to control for the creditors’ loss (haircut), we confirm that official and private defaults may have different effects on GDP growth.
Articolo in rivista - Articolo scientifico
Scientifica
Output losses; Sovereign defaults; Synthetic control method;
English
Marchesi, S., & Masi, T. (2021). Life after default: Private and Official deals. JOURNAL OF INTERNATIONAL MONEY AND FINANCE, 113(May) [10.1016/j.jimonfin.2020.102339].
Marchesi, S; Masi, T
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10281/296590
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