Forty Years of Leverage: What Have We Learned About Sovereign Debt?
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Johnson_Forty years.pdf
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454.58 KB
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Adobe PDF
Checksum (MD5)
ab2f1a29d82bb3ebc815f1fd20089386
Author(s)
Boone, Peter
Johnson, Simon
Date Issued
May 2014
Journal
American Economic Review
Publisher
American Economic Association
Citation
Boone, Peter, and Simon Johnson. “Forty Years of Leverage: What Have We Learned About Sovereign Debt?.” American Economic Review 104, no. 5 (May 2014): 266–271. © 2014 American Economic Association
Version
Final published version
Abstract
Financial crises frequently increase public sector borrowing and threaten some form of sovereign debt crisis. Until recently, high income countries were thought to have become less vulnerable to severe banking crises that have lasting negative effects on growth. Since 2007, crises and attempted reforms in the United States and Europe indicate that advanced countries remain acutely vulnerable. Best practice from developing country experience suggests that regulatory constraints on the financial sector should be strengthened, but this is hard to do in countries where finance has a great deal of political power and cultural prestige, and where leverage is already high.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.104.5.266
