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Forty years of leverage: what have we learned about sovereign debt?

Boone, Peter and Johnson, Simon (2014) Forty years of leverage: what have we learned about sovereign debt? American Economic Review, 104 (5). pp. 266-271. ISSN 0002-8282

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Identification Number: 10.1257/aer.104.5.266


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.

Item Type: Article
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Additional Information: © 2014 American Economic Association
Divisions: LSE
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency; Event Studies
Date Deposited: 12 Jun 2014 16:31
Last Modified: 20 Oct 2021 02:10

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