The determinants of sovereign default

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dc.contributor.author Zeaiter, Hussein en_US
dc.contributor.author Chakrabati, Avik en_US
dc.date.accessioned 2016-05-13T13:06:55Z
dc.date.available 2016-05-13T13:06:55Z
dc.date.copyright 2014 en_US
dc.date.issued 2016-05-16
dc.identifier.issn 1059-0560 en_US
dc.identifier.uri http://hdl.handle.net/10725/3779 en_US
dc.description.abstract A vast and growing empirical literature aims at identifying key determinants of sovereign default. The literature is extensive and controversial. Can policy-makers use this body of research to learn anything that can help reduce the likelihood of sovereign default? We use a variant of Extreme Bound Analysis (EBA) to examine if any of the conclusions from the existing studies on the determinants of sovereign default is robust to small changes in the conditioning information set. Our EBA, spanning 190 countries over 1970–2010, upholds the robustness of the observed association between sovereign default and credit worthiness, growth, leverage on export earnings, debt service ratio, reserves, inflation, exchange rate, trade deficit, corruption, and democratic accountability. At the same time, our EBA reveals that the correlations between sovereign default and several of the controversial variables (namely, openness, central bank liabilities, interest payments, cost of borrowing, imports, exports, per capita GNP, and government stability) are highly sensitive to small alterations in the conditioning information set. en_US
dc.language.iso en en_US
dc.title The determinants of sovereign default en_US
dc.type Article en_US
dc.description.version Published en_US
dc.title.subtitle A sensitivity analysis en_US
dc.author.school SOB en_US
dc.author.idnumber 199704790 en_US
dc.author.department Department of Economics (ECON) en_US
dc.description.embargo N/A en_US
dc.relation.journal International Review of Economics & Finance en_US
dc.journal.volume 33 en_US
dc.article.pages 300-318 en_US
dc.keywords Sovereign debt en_US
dc.keywords Default en_US
dc.keywords Extreme bound analysis en_US
dc.keywords Panel en_US
dc.identifier.doi http://dx.doi.org/10.1016/j.iref.2014.06.003 en_US
dc.identifier.ctation Chakrabarti, A., & Zeaiter, H. (2014). The determinants of sovereign default: A sensitivity analysis. International Review of Economics & Finance, 33, 300-318. en_US
dc.author.email hussein.zeaiter@lau.edu.lb en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url http://www.sciencedirect.com/science/article/pii/S105905601400080X en_US
dc.author.affiliation Lebanese American University en_US

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