SF Fed paper on sovereign debt crises

The Federal Reserve Bank of San Francisco Working Paper "Sovereign debt crises and credit to the private sector" argues that, through its effect on aggregate demand and country risk premia, sovereign debt restructuring can adversely affect the private sector's access to foreign capital markets.

Using fixed effect analysis, we estimate that sovereign debt rescheduling episodes are indeed systematically accompanied by a decline in foreign credit to emerging market private firms, both during debt

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