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Thomas Jefferson on the repudiation of public debt

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  • Frank Gunter

Abstract

Thomas Jefferson's theory of public debt repudiation illustrates both the normative and positive aspects of public debt repudiation. Using Jefferson's model, this paper attempts to reveal several characteristics of public debt repudiation. First, that the positive characteristics of repudiation can not be analyzed apart from the normative and institutional issues. Second, how a debt repudiation rule might be incorporated into a country's constitution and, finally, how such a rule may lead to an improvement of the country's credit terms over those that would exist otherwise. In other words, a country may be better off announcing its standards for repudiation then if it denied any intention to repudiate under any conditions. A related issue, which is beyond the scope of this paper, is the sufficient conditions for repudiation. Jefferson's model develops only the necessary conditions. Copyright George Mason University 1991

Suggested Citation

  • Frank Gunter, 1991. "Thomas Jefferson on the repudiation of public debt," Constitutional Political Economy, Springer, vol. 2(3), pages 283-301, September.
    • Handle: RePEc:kap:copoec:v:2:y:1991:i:3:p:283-301
    DOI: 10.1007/BF02393133
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    References listed on IDEAS

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    1. Vanberg, Viktor & Buchanan, James M, 1986. "Organization Theory and Fiscal Economics: Society, State, and Public Debt," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(2), pages 215-227, Fall.
    2. Jeffrey Sachs & Daniel Cohen, 1982. "LDC Borrowing with Default Risk," NBER Working Papers 0925, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Frank R. Gunter, 2013. "The Political Economy of Iraq," Books, Edward Elgar Publishing, number 14293.
    2. Victor Vaugirard, 2005. "Crony Capitalism and Sovereign Default," Open Economies Review, Springer, vol. 16(1), pages 77-99, January.

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