TY  - GEN
AU  - Erce, Aitor
AU  - Mallucci, Enrico
AU  - Picarelli, Mattia
TI  - The Domestic Side of Sovereign Defaults
PY  - 2020
Y1  - 2020/05/21
DO  - 10.18235/0002318
AB  - Sovereign defaults are increasingly affecting liabilities governed by local law and held by local residents. This paper provides an overview of the existing literature on domestic defaults, describes a novel dataset that codifies defaults according to the jurisdiction of the instruments involved, and shows that domestic and foreign-law defaults have different macroeconomic implications. While a default affects economic growth regardless the legal jurisdiction, local-law defaults are more likely to trigger domestic financial instability and credit tightening, and foreign-law defaults are more likely to tighten access to external financing sources.
UR  - https://doi.org/10.18235/0002318
ER  -