Found 49 article(s) for author 'Carmen Reinhart'

The Antecedents and Aftermath of Financial Crises as told by Carlos F. Díaz Alejandro

The Antecedents and Aftermath of Financial Crises as told by Carlos F. Díaz Alejandro. Carmen Reinhart, July 2015, Paper. “Some of the best-known papers of Carlos F. Díaz Alejandro were about Latin America’s crises in the 1980s and 1930s. I will show data, figures and evidence here about the crises in the advanced economies 30 years later that fit the same narrative. His unadulterated words aptly describe modern problems across geographical borders and, in this case, income levels. This attests to his timeless insight and understanding. Because some of the observations he made have general applicability to the study of recurring patterns across crises, I have taken the liberty to label these as lessons…Link

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Does Reserve Accumulation Crowd Out Investment?

Does Reserve Accumulation Crowd Out Investment? Carmen Reinhart, July 2015, Paper. “It is understood that investment serves as a shock absorber in times of crisis. The duration of the drag on investment, however, is perplexing. For the Asian economies we study, average investment/GDP is about 6 percentage points lower during 1998-2014 than its average level in the decade before the Asian crisis; the decline is greater if China is excluded. We document how in the wake of crisis home bias in finance increases markedly as public and private sectors look inward when external financing becomes prohibitively costly or undesirable...” Link

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Financial Crises, Development, and Growth: A Long-term Perspective

Financial Crises, Development, and Growth: A Long-term Perspective. Carmen M. Reinhart, April 24, 2015, Paper. “Observed over long periods, the upward path of the output of most economies occasionally takes jagged steps down. More often than not, these events are associated with a variety of crises, including systemic banking stresses, exchange rate crashes, a burst of inflation, and a restructuring or default on sovereign debt. Using a large panel of countries over a long period, we document that crises are typically associated with lower medium-term growth. That may be a direct causal channel, a reverse channel, or the influence of some other factors…” Link

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From Financial Repression to External Distress: The Case of Venezuela

From Financial Repression to External Distress: The Case of Venezuela. Carmen Reinhart, April 2015, Paper. “The literature on external default has stressed the existence of the so-called debt-intolerance puzzle: developing nations tend to default at debt-to-GDP ratios well bellow those of developed countries. The underestimation or plain omission of domestic debt may account for a fraction of that puzzle. We calculate fiscal revenues coming from financial repression using different methodologies for the case of Venezuela, and look at their correspondence with comprehensive measures of capital flight…Link

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Dealing with Debt

Dealing with Debt. Carmen M. Reinhart, Kenneth Rogoff, February 2015, Paper. “This paper explores the menu of options for renormalizing public debt levels relative to nominal activity in the long run, should governments eventually decide to do so. Orthodox ones for medium-term debt stabilization, the standard fare of officialdom, include enhancing growth, running primary budget surpluses, and privatizing government assets. Heterodox polices include restructuring debt contracts, generating unexpected inflation, taxing wealth, and repressing private finance. We examine 70 episodes across 22 advanced economies…” Link

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This Time is Different: A Panoramic View of Eight Centuries of Financial Crises

This Time is Different: A Panoramic View of Eight Centuries of Financial Crises, Carmen M. Reinhart, Kenneth Rogoff, November 2014, Paper, This paper offers a “panoramic” analysis of the history of financial crises dating from England’s fourteenth-century default to the current United States sub-prime financial crisis. Our study is based on a new dataset that spans all regions. It incorporates a number of important credit episodes seldom covered in the literature, including for example, defaults and restructurings in India and China. As the first paper employing this data, our aim is to illustrate some of the broad insights that can be gleaned from such a sweeping historical database. We find that serial default is a nearly universal phenomenon as countries struggle to transform themselves from emerging markets to advanced economies. Link

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Sovereign-debt relief and its aftermath: The 1930s, the 1990s, the future?

Sovereign-debt relief and its aftermath: The 1930s, the 1990s, the future?, Carmen M. Reinhart, October 21, 2014, Opinion, To work towards resolving Europe’s ongoing debt crisis this column looks to the past. From the recent emerging market debt crisis (1980s-2000s) and the interwar episode of the 1920s-1930s we learn that debt write-downs and defaults are able to be postponed but not prevented. Punishment for default is temporary, sometimes followed by a renewed surge in borrowing that leads to another crisis. Link

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A Distant Mirror of Debt, Default, and Relief

A Distant Mirror of Debt, Default, and Relief. Carmen Reinhart, October 2014, Paper. “We take a first pass at quantifying the magnitudes of debt relief achieved through default and restructuring in two distinct samples: 1979-2010, focusing on credit events in emerging markets, and 1920-1939, documenting the official debt hangover in advanced economies that was created by World War I and its aftermath. We examine the economic performance of debtor countries during and after these overhang episodes, by tracing the evolution of real per capita GDP (levels and growth rates); sovereign credit ratings…” (May require purchase or user account) Link

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Recovery from Financial Crises: Evidence from 100 Episodes

Recovery from Financial Crises: Evidence from 100 Episodes. Kenneth Rogoff, Carmen Reinhart, Paper, January 2014. “We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, it takes about eight years to reach the pre-crisis level of income; the median is about 6 ½ years. Five to six years after the onset of crisis, only Germany and the US (out of 12 systemic cases) have reached their 2007-2008 peaks in real income. Forty-five percent of the episodes recorded double dips. Postwar business…” (May require user account or purchase) Link

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Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten

Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten. Carmen Reinhart, Kenneth Rogoff, December 24, 2013, Paper. “Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth…” Link verified June 19, 2014

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