HKS Affiliated Authors
Minos A. Zombanakis Professor of the International Financial System
Excerpt
Excerpt
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