Balance Sheets and Debt Crises – Empirical Regularities for Modern Cases of Sovereign Distress

May 4, 2021

Preview Citation

Format: Chicago

Alexis Meyer-Cirkel, and Gonzalo Huertas. Balance Sheets and Debt Crises – Empirical Regularities for Modern Cases of Sovereign Distress, (USA: International Monetary Fund, 2021) accessed December 30, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Public and private sector balance sheets are an important component to any analysis of debt sustainability. A vulnerable and indebted private sector can become a sudden liability for the government; alternatively, resilient household and bank balance sheets may reveal potential sources of funding for the sovereign during times of fiscal distress. In this paper, we document empirical regularities in the behavior of macroeconomic variables during debt crises, and show how both macroeconomic fundamentals and sectoral net worth can affect the likelihood of undergoing default.

Subject: Commercial banks, Debt default, External debt, Financial crises, Financial institutions, Financial statements, Public debt, Public financial management (PFM)

Keywords: Balance sheet dynamics, Banking sector balance sheet data, Commercial banks, Debt default, Default episode, Default probability, Financial statements, Global, Predicting default, Sectoral balance sheets

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/125
Stock No:

WPIEA2021125
ISBN:

9781513574011
ISSN:

1018-5941

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