IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2636.html
   My bibliography  Save this paper

Default and Renegotiation of Latin American Foreign Bonds in the Interwar Period

Author

Listed:
  • Erika Jorgensen
  • Jeffrey Sachs

Abstract

This paper examines the patterns of defaults, renegotiations, and final settlements on foreign borrowing of several Latin American governments in the interwar period. One goal of the paper is to provide a detailed historical account of the borrowing and renegotiation experience of five Latin borrowers (Argentina, Bolivia, Chile, Colombia, and Peru). Another goal is to provide a quantitative assessment of the amount of debt relief that was implicit in the negotiated settlements of the defaults that were reached in the 1930s and 1940s. In general, the pattern of default and renegotiation resulted in substantial, though not complete, debt relief, in the sense of reducing the present value of debt repayments from the sovereign borrower to the bondholders.

Suggested Citation

  • Erika Jorgensen & Jeffrey Sachs, 1988. "Default and Renegotiation of Latin American Foreign Bonds in the Interwar Period," NBER Working Papers 2636, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2636
    Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2636.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anonymous, 1964. "International Bank for Reconstruction and Development," International Organization, Cambridge University Press, vol. 18(4), pages 846-854, October.
    2. Jeffrey Sachs & Harry Huizinga, 1987. "U.S. Commercial Banks and the Developing-Country Debt Crisis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(2), pages 555-606.
    3. Grossman, Herschel I & Van Huyck, John B, 1988. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," American Economic Review, American Economic Association, vol. 78(5), pages 1088-1097, December.
    4. Anonymous, 1964. "International Bank for Reconstruction and Development," International Organization, Cambridge University Press, vol. 18(1), pages 175-187, January.
    5. Anonymous, 1964. "International Bank for Reconstruction and Development," International Organization, Cambridge University Press, vol. 18(3), pages 604-616, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mauricio Avella Gómez, 2003. "Antecedentes Históricos de la Deuda Colombiana. El Proceso de Moratoria Formal Sobre la Deuda Externa entre 1931 y 1935," Borradores de Economia 271, Banco de la Republica de Colombia.
    2. Gundlach, Erich & Scheide, Joachim & Sinn, Stefan, 1990. "Die Entwicklung nationaler Auslandsvermögenspositionen: Konsequenzen für die Wirtschaftspolitik," Open Access Publications from Kiel Institute for the World Economy 414, Kiel Institute for the World Economy (IfW Kiel).
    3. Sánchez-Torres, Fabio & Bedoya-Ospina, Juan Guillermo, 2017. "La danza de los millones, 1923-1931," Chapters, in: Uribe, José Darío (ed.), Historia del Banco de la República 1923-2015, chapter 2, pages 25-84, Banco de la Republica de Colombia.
    4. Juan Flores Zendejas & Pierre Pénet & Christian Suter, 2021. "The Revenge of Defaulters. Sovereign Defaults and Interstate Negotiations in the Post-War Financial Order, 1940–65," Post-Print hal-03352783, HAL.
    5. Papadia, Andrea, 2017. "Sovereign defaults during the Great Depression: the role of fiscal fragility," Economic History Working Papers 68943, London School of Economics and Political Science, Department of Economic History.
    6. Daniel Fried, 2017. "Inflation, Default, and the Currency Composition of Sovereign Debt in Emerging Economies: Working Paper 2017-01," Working Papers 52385, Congressional Budget Office.
    7. Mauricio Avella Gómez, 2003. "Antecedentes Históricos de la Deuda Colombiana. El Proceso de Moratoria Formal sobre la Deuda Externa entre 1931 y 1935," Borradores de Economia 2005, Banco de la Republica.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Houck, James P., 1973. "Some Aspects Of Income Stabilization For Primary Producers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 17(3), pages 1-16, December.
    2. R.G. Akhmadeev & O.A. Bykanova & N.V. Philippova & I.V. Vashchekina & T.B. Turishcheva, 2018. "Macroeconomic Indicators and their Impact on the Foreign Debt Burden: The Case of BRICS Countries," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 68-82.
    3. repec:ers:journl:v:vi:y:2018:i:2:p:68-82 is not listed on IDEAS
    4. Fuhmei Wang, 2009. "The effects of foreign borrowing policies on economic growth: success or failure?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 12(4), pages 273-284.
    5. Fuhmei Wang, 2009. "The effects of foreign borrowing policies on economic growth: success or failure?," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 12(4), pages 273-284.
    6. Jonathan P. Thomas, 2001. "Default Costs, Willingness to Pay and Sovereign Debt Buybacks," International Finance 0103002, University Library of Munich, Germany.
    7. Fafchamps, Marcel, 1996. "Sovereign debt, structural adjustment, and conditionality," Journal of Development Economics, Elsevier, vol. 50(2), pages 313-335, August.
    8. Falko Juessen & Andreas Schabert, 2013. "Fiscal Policy, Sovereign Default, and Bailouts," Working Paper Series in Economics 67, University of Cologne, Department of Economics.
    9. Alfaro, Laura & Kanczuk, Fabio, 2009. "Optimal reserve management and sovereign debt," Journal of International Economics, Elsevier, vol. 77(1), pages 23-36, February.
    10. Dias, Daniel A. & Richmond, Christine & Wright, Mark L.J., 2014. "The stock of external sovereign debt: Can we take the data at ‘face value’?," Journal of International Economics, Elsevier, vol. 94(1), pages 1-17.
    11. Brutti, Filippo, 2008. "Legal enforcement, public supply of liquidity and sovereign risk," MPRA Paper 13949, University Library of Munich, Germany.
    12. Ricardo Sabbadini, 2018. "International Reserves Management in a Model of Partial Sovereign Default," Working Papers, Department of Economics 2018_14, University of São Paulo (FEA-USP).
    13. Silvia Marchesi & Tania Masi, 2019. "Sovereign risk after sovereign restructuring. Private and official default," Working Papers 423, University of Milano-Bicocca, Department of Economics, revised Nov 2019.
    14. António Portugal Duarte & João Sousa Andrade, 2012. "How the Gold Standard functioned in Portugal: an analysis of some macroeconomic aspects," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 617-629, February.
    15. Fernando Ossa, 1988. "El Sistema Monetario Internacional en los Últimos Veinticinco Años," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 25(76), pages 405-430.
    16. Eduardo Borensztein & Ugo Panizza, 2009. "The Costs of Sovereign Default," IMF Staff Papers, Palgrave Macmillan, vol. 56(4), pages 683-741, November.
    17. Rieth, Malte, 2014. "Myopic governments and welfare-enhancing debt limits," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 250-265.
    18. Goldberg, Linda & Spiegel, Mark M., 1992. "Debt write-downs and debt--equity swaps in a two-sector model," Journal of International Economics, Elsevier, vol. 33(3-4), pages 267-283, November.
    19. Evan Osborne, 2010. "Why Do Some Kinds of Stars Get the Calls?," Journal of Sports Economics, , vol. 11(2), pages 203-213, April.
    20. Knaup, M. & Wagner, W.B., 2009. "A Market Based Measure of Credit Quality and Banks' Performance During the Subprime Crisis," Other publications TiSEM a6e8a0c8-00de-45b7-bb02-2, Tilburg University, School of Economics and Management.
    21. Ricardo Sabbadini, 2017. "Overcoming the Original Sin: Gains from Local Currency External Debt," Working Papers, Department of Economics 2017_27, University of São Paulo (FEA-USP).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2636. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.