Arbeitspapier
One reason countries pay their debts: Renegotiation and international trade
This paper estimates the effect of sovereign debt renegotiation on international trade. Sovereign default may be associated with a subsequent decline in international trade either because creditors want to deter default by debtors, or because trade finance dries up after default. To estimate the effect, I use an empirical gravity model of bilateral trade and a large panel data set covering fifty years and more than 200 trading partners. The model controls for a host of factors that influence bilateral trade flows, including the incidence of International Monetary Fund programs. Using the dates of sovereign debt renegotiations conducted through the Paris Club as a proxy measure for sovereign default, I find that renegotiation is associated with an economically and statistically significant decline in bilateral trade between a debtor and its creditors. The decline in bilateral trade is approximately 8 percent a year and persists for about fifteen years.
- Sprache
-
Englisch
- Erschienen in
-
Series: Staff Report ; No. 142
- Klassifikation
-
Wirtschaft
Trade: General
International Lending and Debt Problems
- Thema
-
empirical, sovereign, default, bilateral, panel, gravity, Paris Club, rescheduling
Umschuldung
Außenwirtschaft
Insolvenz
Gravitationsmodell
Schätzung
Welt
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Rose, Andrew K.
- Ereignis
-
Veröffentlichung
- (wer)
-
Federal Reserve Bank of New York
- (wo)
-
New York, NY
- (wann)
-
2001
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Rose, Andrew K.
- Federal Reserve Bank of New York
Entstanden
- 2001
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