����vlog����

In taking stock of the sovereign debt crises in the aftermath of the global financial crisis in 2007, an influential IMF report in 2013 stated that “debt restructurings have often been too little and too late, thus failing to reestablish debt sustainability and market access in a durable way.” This work revisits the relationship between the extent of creditor haircuts and debt relief in debt restructurings and subsequent macroeconomic developments. It finds that deeper debt restructurings generally are generally associated with higher GDP growth and lower inflation and debt burdens two to five years after the completion of the restructuring. At the same time, deeper restructurings are often associated with a worsening of the current account and primary fiscal balances suggesting that countries may revert to expansionary policies after the financing constraints have been reduced due to the debt restructuring. The work also demonstrates that the problem of delayed restructurings remains largely un-addressed despite considerable work in international fora such as the G20 and at international financial institutions on reforming the architecture of resolving sovereign debt crises.

This study group / discussion is open to all HUID holders. Registration is not necessary.

M-RCBG welcomes individuals with disabilities to participate in its programs. To request accommodations or ask questions about access provided, please email: mrcbg@hks.harvard.edu