Authors: Panizza, Ugo; Sturzenegger, Federico; Zettelmeyer, Jeromin

Source: Journal of Economic Literature, Volume 47, Number 3, September 2009 , pp. 651-698(48)

Publisher: American Economic Association

Abstract:

This paper surveys the recent literature on sovereign debt and relates it to the evolution of the legal principles underlying the sovereign debt market and the experience of the most recent debt crises and defaults. It finds limited support for theories that explain the feasibility of sovereign debt based on either external sanctions or exclusion from the international capital market and more support for explanations that emphasize domestic costs of default. The paper concludes that there remains a case for establishing institutions that reduce the cost of default but the design of such institutions is not a trivial task.

Document Type: Research article

DOI: http://dx.doi.org/10.1257/jel.47.3.651

Publication date: 2009-09-01

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• The Journal of Economic Literature (JEL) began publication in 1969 under the auspices of the American Economic Association with quarterly issues appearing in March, June, September, and December. JEL contains survey and review articles, book reviews, an annotated bibliography of newly published books, and a list of current dissertations in North American universities.
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