Cabot professor of public policy and professor of economics at harvard university. A constant recontracting model of sovereign debt, ssri workshop series 292692, university of wisconsinmadison, social systems research. They started their book around 2003, years before the economy began to crumble. Kenneth rogoff is the first academic to be honoured in the karl brunner. A constant recontracting model of sovereign debt kenneth. Should taxpayers of wealthy countries finance a leveraged buyout of third world debt. Cleaning up third world debt without getting taken to the cleaners by jeremy bulow and kenneth rogoff.
National bureau of economic research international lending to a lessdeveloped country cannot be based on the debtors reputation for making repayments. In the wall street journal, jeremy bulow and kenneth rogoff write that greeces position after the referendum is now much worse. Eight centuries of financial folly and author of the curse of cash. International lending to a lessdeveloped country cannot be based on the debtors reputation for making repayments. Rogoff present a thorough historical and statistical tour of financial hubris through the centuries, a postmortem that will make you wonder how anyone ever believed this time is. Oclcs webjunction has pulled together information and resources to assist library staff as they consider how to handle coronavirus. National bureau of economic research nber kenneth rogoff. The bolivian example it is useful to warn, as jeremy bulow and kenneth rogoff do in another paper in this issue, that debt. First world governments and third world debt by bulow. National bureau of economic research nber date written. A constant recontracting model of sovereign debt the harvard community has made this article openly available. Multilateral negotiations for rescheduling developing country debt.
As always when financial, crises occur, questions arise about whether first world governments should change their role in the restructuring of third world debt, by restructuring the multilateral international financial institutions ifis, creating an international bankruptcy court, or adopting one of the many other. He considered majoring in russian until jeremy bulow, a classmate who is now. Numerous and frequentlyupdated resource results are available from this search. A constant recontracting model of sovereign debt jeremy i. International trade and investment program, international finance and macroeconomics program few sovereign debtors have repudiated their obligations entirely. Kenneth rogoff, professor of economics and public policy at harvard university and recipient of the 2011 deutsche bank prize in financial economics, was the chief economist of the international monetary fund from 2001 to 2003. International trade and investment, international finance and macroeconomics. Jeremy bulow, kenneth rogoff 679 straight market transaction involving no special concessions. A constant recontracting model of sovereign debt, ssri workshop series 292692, university of wisconsinmadison, social systems research institute.
Cambridge, ma 1050 massachusetts avenue, cambridge, mass. Jeremy bulow, kenneth rogoff, and afonso bevilaqua, 1992, official creditor seniority and burden sharing in the former soviet bloc, brookings papers on economic activity. Tavlas the sustainability and optimality of government debt by howell h. Jul 16, 2015 jeremy bulow, kenneth rogoff jeremy bulow, kenneth rogoff. National bureau of economic research the most widely proposed ldc debt plans are flawed by their failure to recognize the fundamental differences between corporate and sovereign debt. Cabot professor of public policy at harvard university and former chief economist of the international monetary fund, is the coauthor of the new york times bestseller this time is different. Cleaning up third world debt without getting taken to the cleaners. In addition to unifying a field that had previously been considered quite scattered and disconnected, the book contains a significant amount of new research. A constant recontracting model of sovereign debt journal of. Kenneth rogoff professor of economics and thomas d. The most widely proposed ldc debt plans are flawed by their failure to recognize the fundamental differences between corporate and sovereign debt.
Estimating the efficiency gains of debt restructuring. Kenneth saul ken rogoff born march 22, 1953 is an american economist and chess grandmaster. Sachs harvard university comprehensive debt retirement. Pdf why is the first award going to kenneth rogoff. Kenneth rogoff and carmen reinhart researched eight centuries of. Official creditor seniority and burdensharing in the former soviet bloc.
Rogoff thomas d cabot professor of public policy economics department harvard university littauer center 216 cambridge, ma 0283001 tel. A constant recontracting model of sovereign debt, scholarly articles 12491028, harvard university department of economics. It is useful to warn, as jeremy bulow and kenneth rogoff do in another paper in this issue, that debt reduction is not necessarily a panacea for heavily indebted countries. Owned and operated by jeremy stampfer since 2009, jeremys books specialises in rare and collectable books, ancient and modern maps, vintage travel guides, fiction and nonfiction books, threatre programmes, sheet music, vintage. Why sovereigns repay debts to external creditors and why it matters. Economists who did their homework 800 years of it the new. For more from yao yang, visit project syndicate and check it out on facebook and twitter. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Cleaning up thirdworld debt without getting taken to the cleaners.
This paper presents a model of the ongoing bargaining process that determines repayment levels. Unfortunately, these calculations rest on some shaky assumptions. Jul 11, 2015 a recent study of capital flows to and from greece by economists jeremy bulow and kenneth rogoff debunks this. In the wall street journal, jeremy bulow and kenneth rogoff write that greece would have faced far greater austerity had germany and the rest of the eu not come to its rescue. The modern greek tragedy jeremy bulow, kenneth rogoff 10 june 2015 the conventional wisdom in greece is that the nation has suffered years of excessive, troikaimposed austerity in a shortsighted effort to extract maximum repayment. We present a dynamic model of international lending in which borrowers cannot commit to future repayments and in which debtors can sometimes successfully negotiate partial defaults or rescheduling agreements. Jeremy bulow kenneth rogoff graduate school of business department of economics university of chicago university of wisconsin 1101 east 58th street 1180 observatory drive chicago, illinois 60637 madison, wisconsin 53706 312 96277 608 2633875. The pos sibility of a repurchase was first discussed shortly after the banks. Official creditor seniority and burdensharing in the former soviet bloc, brookings papers on economic activity, economic studies program, the brookings institution, vol.
Dealing with developing country debt in the 1990s, the world economy 15, july 1992, 475 86. Brookings papers on economic activity 1, 1992 olivier. That is, loans to ldcs will not be made or repaid unless foreign creditors have legal or other direct sanctions they can exercise against a sovereign debtor who defaults even if some lending is feasible because of direct sanctions, having a reputation for repayment in. A constant recontracting model of sovereign debt by jeremy. That is, loans to ldcs will not be made or repaid unless foreign creditors have. Serial default and the paradox of rich to poor capital flows, with carmen m. Jun 10, 2015 jeremy bulow, kenneth rogoff 10 june 2015 this column discusses how recent experience casts light on relative merits of the two main conceptual approaches to modelling sovereign lending and default the reputation approach and the punishment approach. Jeremys books of southampton offers a wide range of books, maps, ephemera and other paper collectables with great emphasis on honesty and customer service. Your story matters citation bulow, jeremy, and kenneth s. The euros pigheaded masters global public square cnn. He considered majoring in russian until jeremy bulow, a classmate. As the tables below show, capital flows into greece have not just remained positive. All parties in a debt rescheduling negotiation realize that todays rescheduling agreement may itself have to be renegotiated in the future. Jeremy bulow and kenneth rogoff 1989, a constant recontracting model of sovereign debt, journal of political economy, 97 1, february, 15578 9.
We show, in a reasonably general model, that if a highly indebted country has good investment projects available to it, then it will not benefit from using any of its resources to buy back debt at market prices. Reliable information about the coronavirus covid19 is available from the world health organization current situation, international travel. Apr 07, 2016 kenneth rogoff, professor of economics and public policy at harvard university and recipient of the 2011 deutsche bank prize in financial economics, was the chief economist of the international monetary fund from 2001 to 2003. Kenneth rogoff has been a member of the group of thirty g30, an international committee made up of 30 leading current and former policymakers, financiers and academics.
Bulow and rogoff 1988b, 1991 show how one can analyse these issues within a direct punishments framework. Cleaning up third world debt without getting taken to the. Jul 04, 2010 kenneth rogoff and carmen reinhart researched eight centuries of financial crises for this time is different. Solving the feldsteinhorioka puzzle with financial frictions, econometrica, april 2010. No cure for overhang, nber working papers 2850, national bureau of economic research, inc. In my 1989 journal of political economy and related 1988 imf staff papers publications with jeremy bulow. A constant recontracting model of sovereign debt, university of chicago george g. Greeces sovereign debt and economic realism vox, cepr.
An intertemporal optimizing framework by jonathan ostry. Jeremy bulow and i made a proposal along these lines 25 years ago. Jun 30, 2017 greeces sovereign debt and economic realism jeremy bulow, john geanakoplos 30 june 2017 this column analyses how sophisticated and experienced negotiators like the imf, the eurozone leadership, and by now even the greeks, could have let negotiations drag out for so many years, and goes on to propose a plan which might be just radical enough. A constant recontracting model of sovereign debt jstor. Published in volume 4, issue 1, pages 3142 of journal of economic perspectives, winter 1990, abstract. Stigler center for study of economy and state 43, chicago center for study of economy and state.
It is not the people of greece who have benefited from bailout loans but the european and greek banks which recklessly lent money to the greek state. A constant recontracting model of sovereign debt journal. This paper shows that, under fairly general conditions, lending to small countries must be supported by the. Everyday low prices and free delivery on eligible orders. The buyback boondoggle brookings papers on economic activity, 1988, no. Why sovereigns repay debts to external creditors and why it. International debt a constant recontracting model of sovereign debt, with kenneth rogoff. In this scenario, countries interested in borrowing large amounts from abroad would need to develop institutions that made the promise to repay credible.
A constant recontracting model of sovereign debt, nber working papers 2088, national bureau of economic research, inc. Schiller, maxim boycko, vladimir korobov, jeremy bulow, kenneth rogoff, afonso s. Official creditor seniority and burden sharing in the former soviet bloc, by jeremy bulow, kenneth rogoff and afonso bevilaqua, brookings papers in macroeconomic activity 1. Why not default the political economy of sovereign debt by. Bulow and rogoff 1988 show that because protracted debt renegotiations can harm third parties in their. Kenneth rogoff is professor of economics and public policy at harvard university.
Jeremy bulow and kenneth rogoff, a constant recontracting model of sovereign debt, journal of political economy 97. Citeseerx a constant recontracting model of sovereign debt. International trade and investment, international finance and macroeconomics international lending to a lessdeveloped country cannot be based on the debtors reputation for making repayments. Cleaning up thirdworld debt without getting taken to the. But despite the significant sanctions at the disposal of lenders, many borrowers have been able to consistently negotiate for reduced repayments. How largedenomination bills aid crime and tax evasion and constrain monetary policy. Citeseerx document details isaac councill, lee giles, pradeep teregowda. Why sovereigns repay debts to external creditors and why. A constant recontracting model of sovereign debt kenneth rogoff. Few sovereign debtors have repudiated their obligations entirely. A constant recontracting model of sovereign debt nber. Many of these subsequent empirical refutations were already foreshadowed in an influential theoretical paper by jeremy bulow and kenneth rogoff published at the end of the 1980s, in which the authors pointed out that countries actually have other ways of insuring themselves against adverse shocks on the economy. Jeremy bulow and kenneth rogoff, 1989, a constant recontracting model of sovereign debt, the journal of political economy, vol.