How Costly are Debt Crises?

By Davide Furceri, A. Zdzienicka. Social Science Research Network, 2011

198 citations recorded by the source corpus.

The aim of this paper is to assess the short and medium-term impact of debt crises on GDP. Using an unbalanced panel of 154 countries from 1970 to 2008, the paper shows that debt crises produce significant and long-lasting output losses, reducing output by about 10 percent after 8 years. The results also suggest that debt crises tend to be more detrimental than banking and currency crises. The significance of the results is robust to different specifications, identification and endogeneity checks, and datasets.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/86184d2688c7e4963e49bc73401ba5e495c83c0f

Citations in the corpus

• Financial Crises: Explanations, Types, and Implications (2013, unknown): “Borensztein and Panizza (2009), Levy-Yeyati and Panizza (2011), and Furceri and Zdzienicka (2012) all document that debt crises are associated with substantial GDP losses.”