TY  - JOUR
AU  - Eichengreen,Barry
AU  - Hausmann,Ricardo
AU  - Panizza,Ugo
TI  - Currency Mismatches, Debt Intolerance and Original Sin: Why They Are Not the Same and Why it Matters
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10036
PY  - 2003
Y2  - October 2003
UR  - http://www.nber.org/papers/w10036
L1  - http://www.nber.org/papers/w10036.pdf
N1  - Author contact info:
Barry Eichengreen
Department of Economics
University of California, Berkeley
549 Evans Hall 3880
Berkeley, CA 94720-3880
Tel: 510/642-2772
Fax: 510/643-0926
E-Mail: eichengr@econ.Berkeley.edu

Ricardo Hausman
Harvard Kennedy School
79 JFK St.
Cambridge
MA
02138
Tel: 617-496-3740
E-Mail: ricardo_hausmann@harvard.edu

Ugo Panizza
Inter-American Development Bank
Research Dept.
1300 New York Ave., NW
Washington, DC 20577
E-Mail: ugop@iadb.org
AB  - Recent years have seen the development of a large literature on balance sheet factors in emerging-market financial crises.  In this paper we discuss three concepts widely used in this literature.  Two of them    original sin' and  debt intolerance' seek to explain the same phenomenon, namely, the volatility of emerging-market economies and the difficulty these countries have in servicing and repaying their debts.  The debt-intolerance school traces the problem to institutional weaknesses of emerging-market economies that lead to weak and unreliable policies, while the original-sin school traces the problem instead to the structure of global portfolios and international financial markets.  The literature on currency mismatches, in contrast, is concerned with the consequences of these problems and with how they are managed by the macroeconomic and financial authorities.  Thus, the hypotheses and problems to which these three terms refer are analytically distinct.  The tendency to use them synonymously has been an unnecessary source of confusion.
ER  -