The Aftermath of Sovereign Debt Crises
A Narrative Approach
Bibliographic Data
| ID | 10099170 |
|---|---|
| Authors | Rui Esteves (0000-0002-1966-7214, Graduate Institute of International and Development Studies, corresponding author), Susan Kenny (0000-0003-1603-3563, University College Cork), Seán Kenny (University College Cork), Jason Lennard (0000-0002-6700-8969, London School of Economics and Political Science) |
| Year | 2026 |
| Volume | 86 |
| Issue | 1 |
| Pages | 218-257 |
| Publication date | 2026-01-08 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Journal of Economic History (JOURNAL) |
| Journal identifiers | ISSN: 0022-0507 • E-ISSN: 1471-6372 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.1017/s0022050725100995 |
| OpenAlex | W3162481957 |
| Language | EN |
| Citations received | 2 |
| References cited | 81 |
This paper investigates the causal effects of sovereign debt crises in a sample of 50 defaulting economies between 1870 and 2010. As default is potentially endogenous, we use the narrative approach to identify plausibly exogenous episodes. We find economically and statistically significant costs of up to 3.2 percent of GDP before recovering to the pre-crisis level after five years. The average aftermath, however, conceals a large heterogeneity by default cause. Defaults originating from negative supply shocks, political crises, or adverse terms of trade are associated with higher costs. Demand shocks, in contrast, have a moderate effect that is quickly reversed
Business cycle · Debt · Default · Economics · Macroeconomics · Monetary economics · Politics · Sovereign debt · Sovereign default · Sovereignty · Finance · Global Financial Crisis and Policies · International Development and Aid · State Capitalism and Financial Governance
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| Citations per year | 1 |
|---|---|
| Citation span | 2024 - 2026 (3) |
| Highly cited | No |