External and Public Debt Crises

Journal article

Cristina Arellano, Andrew Atkeson, Mark L. J. Wright
NBER Macroeconomics Annual, vol. 30, 2015, pp. 191-244

DOI: 10.1086/685957

Cite

APA Click to copy
Arellano, C., Atkeson, A., & Wright, M. L. J. (2015). External and Public Debt Crises. NBER Macroeconomics Annual, 30, 191–244. https://doi.org/10.1086/685957

Chicago/Turabian Click to copy
Arellano, Cristina, Andrew Atkeson, and Mark L. J. Wright. “External and Public Debt Crises.” NBER Macroeconomics Annual 30 (2015): 191–244.

MLA Click to copy
Arellano, Cristina, et al. “External and Public Debt Crises.” NBER Macroeconomics Annual, vol. 30, 2015, pp. 191–244, doi:10.1086/685957.

BibTeX Click to copy

@article{cristina2015a,
  title = {External and Public Debt Crises},
  year = {2015},
  journal = {NBER Macroeconomics Annual},
  pages = {191-244},
  volume = {30},
  doi = {10.1086/685957},
  author = {Arellano, Cristina and Atkeson, Andrew and Wright, Mark L. J.}
}

Abstract

The recent debt crises in Europe and the U.S. states feature similar sharp increases in spreads on government debt but also show important differences. In Europe, the crisis occurred at high government indebtedness levels and had spillovers to the private sector. In the United States, state government indebtedness was low, and the crisis had no spillovers to the private sector. We show theoretically and empirically that these different debt experiences result from the interplay between differences in the ability of governments to interfere in private external debt contracts and differences in the flexibility of state fiscal institutions.