EconomicDynamics Interviews Gita Gopinath on Sovereign Default. Gita Gopinath, November 2011, Opinion. "The interaction between high public debt and the inability to devalue has come up frequently in discussions of the Euro crisis. However, there is an important distinction to be made. There are two channels through which a currency devaluation can help a government repay its debt: One, by reducing the real value of the debt owed and two by stimulating the economy through adjustments of the terms of trade and therefore raising primary fiscal surpluses for the government. The first channel is relevant to the extent that the debt is..." Link