IMF Staff Papers, Volume 56, No. 4

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IMF Staff Papers, Volume 56, No. 4 is written by International Monetary Fund. Research Dept. and published by International Monetary Fund. It's available with International Standard Book Number or ISBN identification 1589069102 (ISBN 10) and 9781589069107 (ISBN 13).

This paper empirically evaluates four types of costs that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.