Contents:
Volume I
Research Review Robert W. Kolb
PART I THE THEORY OF SOVEREIGN DEBT
1. Robert J. Barro (1974), ‘Are Government Bonds Net Wealth?’,
Journal of Political Economy, 82 (6), November–December,
1095–117
2. Robert J. Barro (1979), ‘On the Determination of the Public
Debt’, Journal of Political Economy, 87 (5, Part 1), October,
940–71
3. Martin Feldstein (1985), ‘Debt and Taxes in the Theory of Public
Finance’, Journal of Public Economics, 28 (2), November, 233–45
4. Jonathan Eaton and Mark Gersovitz (1981), ‘Debt with Potential
Repudiation: Theoretical and Empirical Analysis’, Review of
Economic Studies, XLVII (2), April, 289–309
5. Jonathan Eaton, Mark Gersovitz and Joseph E. Stiglitz (1986),
‘The Pure Theory of Country Risk’, European Economic Review, 30
(3), June, 481–513
6. Herschel I. Grossman and John B. Van Huyck, (1988), ‘Sovereign
Debt as a Contingent Claim: Excusable Default, Repudiation, and
Reputation’, American Economic Review, 78 (5), December,
1088–97
7. Jeremy Bulow and Kenneth Rogoff (1989), ‘Sovereign Debt: Is to
Forgive to Forget?’, American Economic Review, 79 (1), March,
43–50
8. Jeremy Bulow and Kenneth Rogoff (1989), ‘A Constant
Recontracting Model of Sovereign Debt’, Journal of Political
Economy, 97 (1), February, 155–78
9. Harold L. Cole and Patrick J. Kehoe (1998), ‘Models of Sovereign
Debt: Partial Versus General Reputations’, International Economic
Review, 39 (1), February, 55–70
10. Kenneth M. Kletzer and Brian D. Wright (2000), ‘Sovereign Debt
as Intertemporal Barter’, American Economic Review, 90 (3), June,
621–39
PART II SOVEREIGN DEBT BEFORE THE MODERN STATE
11. John M. Veitch (1986), ‘Repudiations and Confiscations by the
Medieval State’, Journal of Economic History, 46 (1), March,
31–6
12. J. Bradford De Long and Andrei Shleifer (1993), ‘Princes and
Merchants: European City Growth Before the Industrial Revolution’,
Journal Of Law and Economics, XXXVI (2), October, 671–702
13. James Conklin (1998), ‘The Theory of Sovereign Debt and Spain
under Philip II’, Journal of Political Economy, 106 (3), June,
483–513
14. Mauricio Drelichman and Hans-Joachim Voth (2010), ‘The
Sustainable Debts of Philip II: A Reconstruction of Castile’s
Fiscal Position, 1566–1596’, Journal of Economic History, 70 (4),
December, 813–42
15. Mauricio Drelichman and Hans-Joachim Voth (2011), ‘Lending to
the Borrower from Hell: Debt and Default in the Age of Philip II’,
Economic Journal, 121 (557), December, 1205–27, technical
appendix
16. Mauricio Drelichman and Hans-Joachim Voth (2011), ‘Serial
Defaults, Serial Profits: Returns to Sovereign Lending in Habsburg
Spain, 1566–1600’, Explorations in Economic History, 48 (1),
January, 1–19
17. Mauricio Drelichman and Hans-Joachim Voth (2015), ‘Risk Sharing
with the Monarch: Contingent Debt and Excusable Defaults in the Age
of Philip II, 1556–1598’, Cliometrica, 9 (1), January, 49–75
18. Earl J. Hamilton (1947), ‘Origin and Growth of the National
Debt in Western Europe’, American Economic Review, 37 (2), May,
118–30
19. David R. Weir (1989), ‘Tontines, Public Finance, and Revolution
in France and England, 1688–1789’, Journal of Economic History, 49
(1), March, 95–124
PART III POLITICAL INSTITUTIONS AND SOVEREIGN DEBT
20. Douglass C. North and Barry R. Weingast (1989), ‘Constitutions
and Commitment: The Evolution of Institutional Governing Public
Choice in Seventeenth-Century England’, Journal of Economic
History, XLIX (4), December, 803–32
21. David Stasavage (2002), ‘Credible Commitment in Early Modern
Europe: North and Weingast Revisited’, Journal of Law Economics and
Organization, 18 (1), April, 155–86
22. Kenneth A. Schultz and Barry R. Weingast (2003), ‘The
Democratic Advantage: Institutional Foundations of Financial Power
in International Competition’, International Organization, 57 (1),
Winter, 3–42
23. Sebastian M. Saiegh (2005), ‘Do Countries Have a “Democratic
Advantage”?: Political Institutions, Multilateral Agencies, and
Sovereign Borrowing’, Comparative Political Studies, 38 (4), May,
366–87
24. David Stasavage (2007), ‘Cities, Constitutions, and Sovereign
Borrowing in Europe, 1274–1785’, International Organization, 61
(3), July, 489–525
25. Candace C. Archer, Glen Biglaiser and Karl DeRouen Jr. (2007),
‘Sovereign Bonds and the “Democratic Advantage”: Does Regime Type
Affect Credit Rating Agency Ratings in the Developing World?’,
International Organization, 61 (2), April, 341–65
26. Glen Biglaiser and Joseph L. Staats (2012), ‘Finding the
“Democratic Advantage” in Sovereign Bond Ratings: The Importance of
Strong Courts, Property Rights Protection, and the Rule of Law’,
International Organization, 66 (3), July, 515–35
27. Emanuel Kohlscheen (2007), ‘Why Are There Serial Defaulters?
Evidence from Constitutions’, Journal of Law and Economics, 50 (4),
November, 713–30
28. Juan Carlos Hatchondo and Leonardo Martinez (2010), ‘The
Politics of Sovereign Defaults’, Economic Quarterly, 96 (3), Third
Quarter, 291–317
29. Atif Mian, Amir Sufi and Francesco Trebbi (2014), ‘Resolving
Debt Overhangs: Political Constraints in the Aftermath of Financial
Crises’, American Economic Journal: Macroeconomics, 6 (2), April,
1–28
PART IV SOVEREIGN DEBT: THE LONG VIEW
30. Mark Dincecco (2010), ‘The Political Economy of Fiscal Prudence
in Historical Perspective’, Economics and Politics, 22 (1), March,
1–36
31. Michael D. Bordo (1999), ‘International Rescues versus
Bailouts: A Historical Perspective’, Cato Journal, 18 (3), Winter,
363–75
32. John Joseph Wallis (2000), ‘American Government Finance in the
Long Run: 1790 to 1990’, Journal of Economic Perspectives, 14 (1),
Winter, 61–82
33. Carmen M. Reinhart and Vincent R. Reinhart (2015), ‘Financial
Crises, Development, and Growth: A Long-Term Perspective’, World
Bank Economic Review, Annual Bank Conference on Development
Economics “The Role of Theory in Development Economics” June 2–3,
2014 Washington D.C., 29 (Supplement 1), April, S57–S76
34. Carmen M. Reinhart, Vincent R. Reinhart and Kenneth S. Rogoff
(2012), ‘Public Debt Overhangs: Advanced–Economy Episodes Since
1800’, Journal of Economic Perspectives, 26 (3), Summer, 69–86
35. Moritz Schularick and Alan M. Taylor (2012), ‘Credit Booms Gone
Bust: Monetary Policy, Leverage Cycles, and Financial Crises,
1870–2008’, American Economic Review, 102 (2), April, 1029–61
Volume II
Acknowledgements
PART I THE “LONG” 19TH CENTURY
1. Michael D. Bordo and Eugene N. White (1991), ‘A Tale of Two
Currencies: British and French Finance During the Napoleonic Wars’,
Journal of Economic History, 51 (2), June, 303–16
2. Marc Flandreau and Juan H. Flores (2009), ‘Bonds and Brands:
Foundations of Sovereign Debt Markets, 1820–1830’, Journal of
Economic History, 69 (3), September, 646–84
3. Gerardo della Paolera and Alan M. Taylor (2013), ‘Sovereign Debt
in Latin America, 1820–1913’, Revista de Historia Económica/Journal
of Iberian and Latin American Economic History, 31 (2), September,
173-217
4. Richard Sicotte, Catalina Vizcarra and Kirsten Wandschneider
(2010), ‘Military Conquest and Sovereign Debt: Chile, Peru and the
London Bond Market, 1876–1890’, Cliometrica, 4 (3), October,
293–319
5. Marc D. Weidenmier (2005), ‘Gunboats, Reputation, and Sovereign
Repayment: Lessons from the Southern Confederacy’, Journal of
International Economics, 66 (2), July, 407–22
6. Michael D. Bordo and Hugh Rockoff (1992), ‘The Gold Standard as
a “Good Housekeeping Seal of Approval”’, Journal of Economic
History, 56 (2), June, 389–428
7. Niall Ferguson and Moritz Schularick (2006), ‘The Empire Effect:
The Determinants of Country Risk in the First Age of Globalization,
1880–1913’, Journal of Economic History, 66 (2), June, 283–312
8. Theodore Roosevelt (1904) ‘President Theodore Roosevelt’s Annual
Message to Congress’, delivered December 6th, 1904
9. Kris Mitchener and Marc Weidenmier (2005), ‘Empire, Public
Goods, and the Roosevelt Corollary’, Journal of Economic History,
65 (3), September, 658–92
10. Kris James Mitchener and Marc D. Weidenmier (2010),
‘Supersanctions and Sovereign Debt Repayment’, Journal of
International Money and Finance, 29 (1), February, 19–36
PART II THE 20TH CENTURY IN PERSPECTIVE
11. Barry Eichengreen and Ricardo Hausmann (1999) ‘Exchange Rates
and Financial Fragility’ in Federal Reserve Bank of Kansas City
(eds.), New Challenges for Monetary Policy, 329–68
12. Michael D. Bordo and Christopher M. Meissner (2006), ‘The Role
of Foreign Currency Debt in Financial Crises: 1880–1913 versus
1972–1997’, Journal of Banking and Finance, 30 (12), December,
3299–329
13. Lyndon Moore and Jakub Kaluzny (2005), ‘Regime Change and Debt
Default: The Case of Russia, Austro-Hungary, and the Ottoman Empire
following World War One’, Explorations in Economic History, 42 (2),
April, 237–58
14. Kim Oosterlinck and John S. Landon–Lane (2006), ‘Hope Springs
Eternal - French Bondholders and the Soviet Repudiation
(1915–1919)’, Review of Finance, 10 (4), 507–35
15. Barry Eichengreen and Richard Portes (1986), ‘Debt and Default
in the 1930s: Causes and Consequences’, European Economic Review,
30 (3), June, 599–640
16. Barry Eichengreen (1991), ‘Historical Research on International
Lending and Debt’, Journal of Economic Perspectives, 5 (2), Spring,
149–69
17. Peter Boone and Simon Johnson (2014), ‘Forty Years of Leverage:
What Have We Learned About Sovereign Debt?’, American Economic
Review: Papers and Proceedings, 104 (5), May, 266–71
PART III CRISES OF THE 1980s AND 1990s
18. Paolo Manasse and Nouriel Roubini (2009), ‘’Rules for Thumb’
for Sovereign Debt Crises’, Journal of International Economics, 78
(2), July, 192–205
19. Bergljot Barkbu, Barry Eichengreen and Ashoka Mody (2012),
‘Financial Crises and the Multilateral Response: What the
Historical Record Shows’, Journal of International Economics, 88
(2), November, 422–35 [14]
20. Allan H. Meltzer (1984), ‘The International Debt Problem’, Cato
Journal, 4 (1), Sping/Summer, 63–9
21. Jeffrey Sachs (1986), ‘Managing the LDC Debt Crisis’, Brookings
Paper on Economic Activity, No. 2, 397–431
22. Jeffrey Sachs and Harry Huizinga (1987), ‘U.S. Commercial Banks
and the Developing-Country Debt Crisis’, Brookings Paper on
Economic Activity, No. 2, 555–601
23. Jeremy Bulow (2002), ‘First World Governments and Third World
Debt’, Brookings Papers on Economic Activity, No. 1, 229–55
24. Allan H. Meltzer (2004), ‘Argentina 2002: A Case of Government
Failure’, Cato Journal, 23 (1), Spring/Summer, 29–31
25. Eugenio Andrea Bruno (2006), ‘The Failure of Debt-Based
Development: Lessons from Argentina’, Cato Journal, 26 (2),
Spring/Summer, 357–65
PART IV THE RISKS AND COSTS OF SOVEREIGN DEFAULT
26. Juan Carlos Hatchondo, Leonardo Martinez and Horacio Sapriza
(2007), ‘The Economics of Sovereign Default’, Economic Quarterly,
93 (2), Spring, 163–87
27. Ugo Panizza, Federico Sturzenegger and Jeromin Zettelmeyer
(2009), ‘The Economics and Law of Sovereign Debt and Default’,
Journal of Economic Literature, 47 (3), September, 651–98
28. Michael Tomz and Mark L. J. Wright (2013), ‘Empirical Research
on Debt and Default’, Annual Review of Economics, 5, August,
247–72
29. Fernando Broner, Alberto Martin and Jaume Ventura (2010),
‘Sovereign Risk and Secondary Markets’, American Economic Review,
100 (4), September, 1523–55
30. Michael Tomz and Mark L. J. Wright (2007), ‘Do Countries
Default in ‘Bad Times’?’, Journal of the European Economic
Association, 5 (2–3), April–May, 352–60
31. Edward I. Altman and Herbert A. Rijken (2011), ‘Toward a
Bottom-Up Approach to Assessing Sovereign Default Risk’, Journal of
Applied Corporate Finance, 23 (1), Winter, 20–31
32. Federico Sturzenegger and Jeromin Zettelmeyer (2008),
‘Haircuts: Estimating Investor Losses in Sovereign Debt
Restructurings, 1998–2005’, Journal of International Money and
Finance, 27 (5), September, 780–805 [26]
33. Juan J. Cruces and Christoph Trebesch (2013), ‘Sovereign
Defaults: The Price of Haircuts’, American Economic Journal:
Macroeconomics, 5 (3), July, 85–117
34. Miguel Fuentes and Diego Saravia (2010), ‘Sovereign Defaulters:
Do International Capital Markets Punish Them?’, Journal of
Development Economics, 91 (2), March, 336–47
35. Eduardo Levy Yeyati and Ugo Panizza (2011), ‘The Elusive Costs
of Sovereign Defaults’, Journal of Development Economics, 94 (1),
January, 95–105
Volume II
Acknowledgements
PART I THE CONUNDRUM OF SOVEREIGN DEBT
1. Alberto Alesina and David Dollar (2000), ‘Who Gives Foreign Aid
to Whom and Why?’, Journal of Economic Growth, 5 (1), March,
33–63
2. Alberto Alesina and Beatrice Weder (2002), ‘Do Corrupt
Governments Receive Less Foreign Aid?’, American Economic Review,
92 (4), September, 1126–37
3. Craig Burnside and David Dollar (2000), ‘Aid, Policies and
Growth’, American Economic Review, 90 (4), September, 847–68
4. Robert J. Barro and Jong-Wha Lee (2005), ‘IMF Programs: Who is
Chosen and What Are the Effects?’, Journal of Monetary Economics,
52 (7), October, 1245–69
5. William Easterly (2002), ‘How Did Heavily Indebted Poor
Countries Become Heavily Indebted? Reviewing Two Decades of Debt
Relief’, World Development, 30 (10), October, 1677–96
6. Serkan Arslanalp and Peter Blair Henry (2005), ‘Is Debt Relief
Efficient?’, Journal of Finance, LX (2), April, 1017–51
7. Federico Sturzenegger and Jeromin Zettelmeyer (2007),
‘Creditors’ Losses Versus Debt Relief: Results From a Decade of
Sovereign Debt Crises’, Journal of the European Economic
Association, 5 (2–3), April–May, 343–51
8. Rutsel Silvestre J. Martha (1990), ‘Preferred Creditor Status
under International Law: The Case of the International Monetary
Fund’, International and Comparative Law Quarterly, 39 (4),
October, 801–26
9. Raghuram G. Rajan (2005), ‘Institutional Reform and Sovereign
Debt Crises’, Cato Journal, 25 (1), Winter, 17–24
PART II THE EUROZONE SOVEREIGN DEBT CRISIS
10. Nouriel Roubini and Jeffrey Sachs (1989), ‘Government Spending
and Budget Deficits in the Industrial Countries’, Economic Policy,
4 (8), April, 99–132
11. Marina Azzimonti, Eva de Francisco and Vincenzo Quadrini
(2014), ‘Financial Globalization, Inequality, and the Rising Public
Debt’, American Economic Review, 104 (8), August, 2267–302
12. Viral Acharya, Itamar Drechsler and Philipp Schnabl (2014), ‘A
Pyrrhic Victory? Bank Bailouts and Sovereign Credit Risk’, Journal
of Finance, LXIX (6), December, 2689–739
13. Mark Aguiar, Manuel Amador, Emmanuel Farhi and Gita Gopinath
(2014), ‘Sovereign Debt Booms in Monetary Unions’, American
Economic Review: Papers and Proceedings, 104 (5), May, 101–6
14. Laurence J. Kotlikoff (2004), ‘Fiscal Policy and the Future of
the Euro’, Cato Journal, 24 (1–2), Spring/Summer, 51-5
15. Jerome L. Stein (2011), ‘The Diversity of Debt Crises in
Europe’, Cato Journal, 31 (2), Spring/Summer, 199–215
16. Philip R. Lane (2012), ‘The European Sovereign Debt Crisis’,
Journal of Economic Perspectives, 26 (3), Summer, 49–67
17. Kevin H. O’Rourke and Alan M. Taylor (2013), ‘Cross of Euros’,
Journal of Economic Perspectives, 27 (3), March, 167–91
18. John Beirne and Marcel Fratzscher (2013), ‘The Pricing of
Sovereign Risk and Contagion During the European Sovereign Debt
Crisis’, Journal of International Money and Finance, 34, April,
60–82
PART III THE UNITED STATES TODAY AND THE FUTURE OF THE
INDUSTRIALIZED NATIONS
19. Carmen M. Reinhart and Kenneth S. Rogoff (2010), ‘Growth in a
Time of Debt’, American Economic Review, 100 (2), May, 573–78
20. Thomas Herndon, Michael Ash and Robert Pollin (2014), ‘Does
High Public Debt Consistently Stifle Economic Growth? A Critique of
Reinhart and Rogoff’, Cambridge Journal of Economics, 38 (2),
December, 257–79
21. Ugo Panizza and Andrea F. Presbitero (2013), ‘Public Debt and
Economic Growth in Advanced Economies: A Survey’, Swiss Journal of
Economics in Statistics, 149 (2), 175–204
22. Anja Baum, Cristina Checherita-Westphal and Philipp Rother
(2013), ‘Debt and Growth: New Evidence from the Euro Area’, Journal
of International Money and Finance, 32, February, 809–21
23. Alan J. Auerbach, Jagadeesg Gokhale and Laurence J. Kotlikoff
(1994), ‘Generating Accounting: A Meaningful Way to Evaluate Fiscal
Policy’, Journal of Economic Perspectives, 8 (1), Winter, 73–94
24. Pierre Lemieux (2013), ‘American and European Welfare States:
Similar Causes, Similar Effects’, Cato Journal, 33 (2),
Spring/Summer, 227–32
25. Michael Tanner (2013), ‘Is America Becoming Greece?’, Cato
Journal, 33 (2), Spring/Summer, 211–25
26. John H. Cochrane (2011), ‘Inflation and Debt’, National
Affairs, Fall, 56–78
27. Carmen Reinhart and M. Belen Sbrancia (2015), ‘The Liquidation
of Government Debt’, Economic Policy, 30 (82), April, 291–333
PART IV SOVEREIGN DEBT: CONTEMPORARY SOCIAL AND ETHICAL ISSUES
28. James M. Buchanan (1986), ‘The Ethics of Debt Default’, in
James M. Buchanan, Charles K. Rowley and Robert D. Tollison (eds.),
Deficit, Oxford, UK: Basil Blackwell, 361–73
29. Geoffrey Brennan and Giuseppe Eusepi (2002), ‘The Dubious
Ethics of Debt Default’, Public Finance Review, 30 (6), November,
546–61
30. Seema Jayachandran and Michael Kremer (2006), ‘Odious Debt’,
American Economic Review, 96 (1), March, 82–92
31. Albert H. Choi and Eric A. Posner (2007), ‘A Critique of the
Odious Debt Doctrine’, Law and Contemporary Problems, 70 (3),
Summer, 33–51
32. Nouriel Roubini (2002), ‘Do We Need a New Bankruptcy Regime?’,
Brookings Papers on Economic Activity, 1, 321–33
33. Andrei Shleifer (2003), ‘Will the Sovereign Debt Market
Survive?’, American Economic Review, 93 (2), May, 85–90
34. Rohan Pitchford and Mark L. J. Wright (2012), ‘Holdouts in
Sovereign Debt Restructuring: A Theory of Negotiation in a Weak
Contractual Environment’, Review of Economic Studies, 79 (2),
April, 812–37
35. Robert W. Kolb (2015), ‘The Virtue of Vultures: Distressed Debt
Investors in the Sovereign Debt Market’, Journal of Social,
Political, and Economic Studies, 40 (4), Winter, 368–412
Index
Edited by Robert W. Kolb, Professor of Finance and Frank W. Considine Chair of Applied Ethics, Quinlan School of Business, Loyola University Chicago, US
‘Bob Kolb has assembled this outstanding collection of research
articles, which could have been called the Greatest Hits of
Sovereign Debt. The future of all people on the planet depends
heavily on understanding what really happens when governments
borrow. Bringing the body of knowledge of this subject under
this umbrella is a masterful and thankless achievement.’
*Don M. Chance, Louisiana State University, US*
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