TY  - JOUR
AU  - Reinhart,Carmen M.
AU  - Rogoff,Kenneth S.
AU  - Savastano,Miguel A.
TI  - Debt Intolerance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9908
PY  - 2003
Y2  - August 2003
UR  - http://www.nber.org/papers/w9908
L1  - http://www.nber.org/papers/w9908.pdf
N1  - Author contact info:
Carmen M. Reinhart
Peterson Institute for International Economics
1750 Massachusetts Avenue, NW
Washington, DC 20036-1903
Tel: 202-454-1325
Fax: 202-659-3225
E-Mail: creinhart@piie.com

Kenneth S. Rogoff
Thomas D Cabot Professor of Public Policy
Economics Department
Harvard University
Littauer Center 216
Cambridge, MA 02138-3001
Tel: 617-495-4022
Fax: 617/495-7730
E-Mail: krogoff@harvard.edu

Miguel Savastano
Research Dept.
IMF
700 19th Street, N.W.
Washington, D.C. 20431
E-Mail: msavastano@imf.org
AB  - This paper introduces the concept of  debt intolerance,' which manifests itself in the extreme duress many emerging markets experience at debt levels that would seem manageable by advanced country standards. We argue that  safe' external debt-to-GNP thresholds for debt intolerant countries are low, perhaps as low as 15 percent in some cases. These thresholds depend on a country's default and inflation history. Debt intolerance is linked to the phenomenon of serial default that has plagued many countries over the past two centuries. Understanding and measuring debt intolerance is fundamental to assess the problems of debt sustainability, debt restructuring, capital market integration, and the scope for international lending to ameliorate crises. Our goal is to make a first pass at quantifying debt intolerance, including delineating debtors' clubs and regions of vulnerability, on the basis on a history of credit events going back to the 1820s for over 100 countries.
ER  -