{"id":27524,"date":"2017-11-01T15:20:52","date_gmt":"2017-11-01T20:20:52","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27524"},"modified":"2017-11-01T15:20:52","modified_gmt":"2017-11-01T20:20:52","slug":"the-curious-case-of-missing-defaults","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27524","title":{"rendered":"The Curious Case of Missing Defaults"},"content":{"rendered":"<figure class=\"image image--ratio-16-9\"><picture><img decoding=\"async\" class=\" lazyunload lazyloaded\" src=\"https:\/\/webapi.project-syndicate.org\/library\/801302fe84137bb0359ad0e48b53ed4c.jpg\" alt=\"Venezuela bank\" data-src=\"https:\/\/webapi.project-syndicate.org\/library\/801302fe84137bb0359ad0e48b53ed4c.jpg\" \/><\/picture><\/figure>\n<header class=\"listing__header\">\n<h3 class=\"listing__title\"><a href=\"https:\/\/www.project-syndicate.org\/commentary\/missing-emerging-market-debt-defaults-by-carmen-reinhart-2017-11\">THE CURIOUS CASE OF THE MISSING DEFAULTS<\/a><\/h3>\n<\/header>\n<p data-line-id=\"a6ce5acf4bef4406be6161ec15984156\">CAMBRIDGE \u2013 Booms and busts in international capital flows and commodity prices, as well as the vagaries of international interest rates, have long been associated with economic crises, especially \u2013 but not exclusively \u2013 in emerging markets. The \u201ctype\u201d of crisis varies by time and place. Sometimes the \u201csudden stop\u201d in capital inflows sparks a currency crash, sometimes a banking crisis, and quite often a sovereign default. Twin and triple crises are not uncommon.<\/p>\n<aside class=\"inlay inlay--slide slide__container show-for-medium editorpick-container\">\n<article id=\"editor-pick-59f9cc0f78b6c708a80349e1\" class=\"listing slide \" data-url=\"missing-emerging-market-debt-defaults-by-carmen-reinhart-2017-11\" data-page-area=\"editorpicks\">\n<header class=\"listing__header\">\n<h2 class=\"listing__title\"><\/h2>\n<\/header>\n<\/article>\n<div class=\"inlay__controls\" aria-hidden=\"true\">\n<div class=\"flex button__group slide__nav\">The impact of these global forces on open economies, and how to manage them, has been a recurring topic of discussion among international policymakers for decades. With the prospect of the US Federal Reserve raising interest rates in the near and medium term, it is perhaps not surprising that the <a href=\"http:\/\/www.imf.org\/en\/News\/Seminars\/Conferences\/2017\/09\/18\/2017-eighteenth-annual-research-conference\" target=\"_blank\" rel=\"noopener\">International Monetary Fund\u2019s 18th Annual Research Conference<\/a>, to be held on November 2-3, is devoted to the study and discussion of the global financial cycle and how it affects cross-border capital flows.<\/div>\n<\/div>\n<\/aside>\n<p data-line-id=\"5e129cf036eb472dbca61b7590fab673\">Rising international interest rates have usually been bad news for countries where the government and\/or the private sector rely on external borrowing. But for many emerging markets, external conditions began to worsen around 2012, when China\u2019s growth slowed, commodity prices plummeted, and capital flows dried up \u2013 developments that sparked a spate of <a href=\"https:\/\/www.project-syndicate.org\/commentary\/currency-crash-renminbi-volatility-by-carmen-reinhart-2016-01?barrier=accessreg\">currency crashes<\/a> spanning nearly every region.<\/p>\n<p data-line-id=\"ba400e2347a84654b35b3053ba30db5e\">In my <a href=\"http:\/\/www.imf.org\/en\/News\/Seminars\/Conferences\/2017\/09\/18\/~\/media\/76E0E62F8AF744D48A0D59D84D925BF9.ashx\" target=\"_blank\" rel=\"noopener\">recent work<\/a> with Vincent Reinhart and Christoph Trebesch, I show that over the past two centuries, this \u201cdouble bust\u201d (in commodities and capital flows) has led to a spike in sovereign defaults, usually with a lag of 1-3 years. Yet, since the peak in commodity prices and global capital flows around 2011, the incidence of sovereign defaults worldwide has risen only modestly.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>THE CURIOUS CASE OF THE MISSING DEFAULTS CAMBRIDGE \u2013 Booms and busts in international capital flows and commodity prices, as well as the vagaries of international interest rates, have long been associated with economic crises, especially \u2013 but not exclusively \u2013 in emerging markets. The \u201ctype\u201d of crisis varies by time and place. Sometimes the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1876,2915,9756,15752,195,1732,431,2223,3650],"class_list":["post-27524","post","type-post","status-publish","format-standard","hentry","category-economics","tag-booms-and-busts","tag-capital-flow","tag-carmen-reinhart","tag-currency-crash","tag-debt","tag-emerging-markets","tag-interest-rates","tag-sovereign-default","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27524"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27524\/revisions"}],"predecessor-version":[{"id":27525,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27524\/revisions\/27525"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}