DOCSLIB.ORG

Presentation by Carmen Reinhart

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Presentation by Carmen Reinhart Debt Overhangs and Their Resolution Carmen M. Reinhart Harvard University Bruegel Annual Meetings Brussels, September 6-7, 2016 Selected bibliography “Dealing with Debt,” (with Vincent Reinhart and Kenneth Rogoff), Journal of International Economics, Vol. 86(1), April 2015, 543-555. “Recovery from Financial Crises: Evidence from 100 Episodes,” (with Kenneth S. Rogoff) American Economic Review, Vol. 104(5), May 2014, 50-55 (and update, see https://www.project-syndicate.org/commentary/debt-restructuring-needed-as- policy-option-by-carmen-reinhart-2016-04?barrier=true) “The Liquidation of Government Debt,” (with M. Belen Sbrancia), NBER Working Paper 16893, March 2011. Published in Economic Policy, Vol. 30(82), March 2015, 291-333. “Sovereign Debt Relief and its Aftermath,” (with Christoph Trebesch). Journal of the European Economic Association, Vol. 14(1), February 2016, 215-251. “Public Debt Overhangs: Advanced-Economy Episodes since 1800” (with Vincent R. Reinhart and Kenneth S. Rogoff) Journal of Economic Perspectives, Vol. 26(3), Summer 2012, 69-86. Reinhart Outline of talk Advanced economies post crisis (i) Delayed recovery, (ii) deflationary tendencies (iii) Debt overhangs (ii) Undoing debt overhangs Menu of options with a focus on: (i) Debt restructuring, (ii) the role of monetary policy and financial regulation (financial repression). Reinhart The 2007-2009 Crisis: Severity measures It is still premature to construct a definitive measure of the severity of the recent crises Of the 11 advanced economies experiencing a systemic crisis starting in 2007-2008 (France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Portugal, Spain, UK, and US), only Germany and the US have reached their pre-crisis peak in per capita GDP by 2014 and 2 more (Ireland and UK) by 2015. Reinhart 4 Output, Crises and Recovery Reinhart and Rogoff (2014) updated with World Economic Outlook, April 2016 % change Number of years peak to peak to peak to Severity trough trough recovery index Year Country 2008 France -3.8 2 9 12.8 2008 Germany -5.3 1 3 8.3 2008 Greece -24.9 9 15 39.9 2007 Iceland -9.7 3 9 18.7 2007 Ireland -11.0 3 8 19.0 2008 Italy -10.9 7 15 25.9 2008 Netherlands -4.4 5 9 13.4 2008 Portugal -7.0 6 12 19.0 2008 Spain -10.3 6 11 21.3 2007 UK -5.9 2 8 13.9 2007 US -4.8 2 7 11.8 Summary Mean -8.9 4.2 9.6 18.5 Median -7.0 3.0 9.0 18.7 Note: The italics denote any calculation in which IMF estimates for 2014- are used. Reinhart 5 The number of years to recover the pre- crisis peak in per capita GDP in 100 of the worst crises since the 1840s is about 8 years (the median is 6 1/2 years). In the 2007-2008 wave of crises, the average may come in closer to 10 years. Reinhart 6 The incidence of deflation and high inflation, 22 advanced economies, 1945-2016 Share of advanced economies (22 countries) 100 90 80 Share with annual inflation above 10% 70 60 50 Share with deflation 40 30 20 Iceland 10 Japan 2008-2009 0 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Reinhart 7 What factors have made this crisis so protracted? What is the end-game? The list includes: the synchronous nature of the crisis, the absence of greater exchange rate adjustment, austerity, the dearth of credit—(external or domestic), the lack of deleveraging and write-downs (private or public) almost a decade later. Reinhart 8 Gross Total (Public plus Private) External Debt as a Percent of GDP: 22 Advanced Economies, 300 1970-2016:Q1 250 200 % of % of GDP 150 100 50 0 197019721974197619781980198219841986198819901992199419961998200020022004200620082010201220142016 Reinhart 9 The contrast of the Asian Crisis: External Total (Public plus Private) External Debt in Six Asian Economies, 1970-2013 (percent of GDP) Percent 85 Average for India, Indonesia, Korea, Malaysia, Philippines, 75 and Thailand 65 55 45 35 25 Banking crises in at least three countries (shaded) 15 1970 1975 1980 1985 1990 1995 2000 2005 2010 Sources: International Monetary Fund, World EconomicReinhart Outlook, Reinhart and Rogoff (2009), Reinhart (2010), World Bank 10 (2013), International Debt Statistics, Washington DC http://data.worldbank.org/data-catalog/international-debt-statistics, and World Bank, Quarterly External Debt Statistics, (QEDS), http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/EXTDECQEDS/0,,menuPK:1805431~pagePK:64168 427~piPK:64168435~theSitePK:1805415,00.html Undoing debt overhangs Throughout history, debt/GDP ratios have been reduced by: (i) economic growth; (ii) fiscal adjustment/austerity; (iii) explicit default or restructuring; (iv) a sudden surprise burst in inflation; and (v) a steady dosage of financial repression that is accompanied by an equally steady dosage of inflation. (Options (iv) and (v) are only viable for domestic- currency debts). Reinhart Preamble: Financial repression defined Financial repression involves a combination of tighter financial regulation and (usually) sustained low or negative real interest rates. It is an opaque tax. It can include directed lending to the government by: Creating or broadening captive domestic audiences (such as pension funds or domestic banks), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter connection between government and banks, either explicitly through public ownership of some of the banks, balance sheet exposure, or heavy “moral suasion”. Financial repression is also sometimes associated with relatively high reserve requirements (or liquidity requirements), securities transaction taxes, prohibition of gold purchases (as in the US from 1933 to 1974), or the placement of significant amounts of government debt that is nonmarketable. In the current policy discussion, financial repression issues usually come under the broad umbrella of “macro prudential regulation.” Reinhart Public debt as a percent of GDP: Advanced Economies: 1900-2016 S 100 WWII debts: Axis countries: default and WWI and Depression debts financial repression/inflation advanced and emerging Allies: financial 90 economies: default, repression/inflation restructuring and 80 70 60 50 40 30 20 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 Reinhart 13 Public debt reduction has not always been orthodox --even in advanced economies Reinhart, Reinhart and Rogoff (2015) Factors Behind Debt Reversals: Fiscal Adjustment, Restructuring, Inflation, Growth, and Real Interest Rates Growth Primary Real Inflation Default or balance rates restructure > median > median < median > median Total sample, 70 episodes Number of episodes 38 41 41 41 16 Share 0.54 0.61 0.59 0.59 0.23 Post-war cases, 36 episodes Number of episodes 21 16 30 30 9 Share 0.58 0.48 0.86 0.83 0.25 Peacetime, 34 episodes Number of episodes 17 25 11 11 7 Share 0.50 0.74 0.32 0.32 0.21 Memorandum items: Share of debt reduction episodes associated with deflation Total 0.07 War 0.11 Peace 0.03 Reinhart Official debt is the Greek story (but is also substantive for Ireland and Portugal) Arslanalp and Tsuda, (2014) Greece 100% 200 90% 180 80% 160 70% 140 60% 120 50% 100 Percent of total of Percent 40% 80 GDP of Percent 30% 60 20% 40 10% 20 0% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 100% Domestic central bank Domestic bank Domestic nonbank Foreign official sector100 1xxx. 0% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 of GDP of of total of Percent Percent Foreign bank Foreign nonbank Total debt (rhs) Percent Reinhart Reinhart 15 Stylized crisis timeline of the 1920s/1930s and 1980s/1990s—it took a decade or more to arrive at conclusive restructuring Reinhart and Trebesch (2016) Reinhart Real Per Capita GDP Around Debt Relief Events (Exit from Default) in Middle-High Income Emerging Markets (1978-2010) and Advanced Economies (1934) 10-year window around debt relief event, level of real per capita GDP at T=1 1.30 Index T=1 1.20 GDP for 15 advanced economy interwar episodes (T=1934) 1.10 1.00 GDP for 30 middle-to-high income emerging market episodes, 1978-2010 (T=year of final restructuring) 0.90 0.80 T-5 T-4 T-3 T-2 T-1 T T+1 T+2 T+3 T+4 T+5 Reinhart Real interest rates, financial regulation, and the post crisis re-emergence of financial repression Reinhart 18 Historical antecedents on financial repression (Reinhart and Sbrancia, 2011, 2015) For the advanced economies, real interest rates were negative roughly ½ of the time during 1945-1980. “Financial repression” was most successful in liquidating debts when accompanied by a steady dose of inflation. Average annual interest expense savings as a percent of GDP (FR tax) ranged from about 1 to 5 percent of GDP for the full 1945-1980 sample. Reinhart The incidence of negative real short-term interest rates in advanced economies, 1945-2016 (left scale, tan bars) (right scale, red bars) Share of Number of countries with countries with negative real rates negative real rates 100 16 Rates are on 3-month T-bills or 2-year bonds 90 advanced economies, 1945-2016 14 80 12 70 10 60 50 8 40 6 30 4 20 2 10 0 0 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Reinhart 20 Real T-bill Rates Frequency Distributions: 22 Advanced Economies, 1945-2015 Percent of 1946-1979 1980-2007 2008-2015 observations 35 Real Interest rate on T-bills 30 Share of obsevations at or below: 1945-1979 1980-2007 2008-2015 -1 percent -33.9 -5.7 -28.8 25 0 -47.8 -11.3 -57.7 1 percent -62.8 -23.1 -85.9 2 percent -76.5 -38.8 -95.5 20 15 10 5 0 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 real interest rate on 3-month T-bills (percent)
Load more

Recommended publications
  • Drastic Times Page 1 of 3 Economist.Com 1/8/2009
    Economist.com Page 1 of 3 Economics focus Drastic times Jan 8th 2009 From The Economist print edition Past crises inspire little confidence about the outcome of this one for America THE good news, said Alan Blinder of Princeton University to a crowded hall on the opening day of this year’s gathering of the American Economic Association (AEA) in San Francisco, is that the stockmarket rallied yesterday. The bad news, he joked, is that it bounced on hopes that the economy’s problems would be solved at the AEA meetings. No such luck. The prevailing mood at this year’s event was one of despair, not hope. The tone of the three-day conference, which ran between January 3rd and 5th, was set on its first morning when Kenneth Rogoff of Harvard University outlined the results of new research conducted with Carmen Reinhart of the University of Maryland. The paper*, a sequel to work presented at the 2008 conference, looks at the aftermath of past financial meltdowns to gauge just how bad America’s recession might be. The analysis is based on 14 “severe” banking busts, including the Depression as well as the more recent “big- five” crises in the rich world—Spain in the late 1970s, Norway in 1987, and Finland, Japan and Sweden in the early 1990s. The sample also includes seven emerging-market crises that were left out of the earlier analysis for fear of appearing too alarmist. A year on, the authors have no such qualms. The hubristic belief in America that “we don’t have financial crises” is now obviously false, said Mr Rogoff.
    [Show full text]
  • The Pitfalls of External Dependence: Greece, 1829-2015
    BPEA Conference Draft, September 10-11, 2015 The pitfalls of external dependence: Greece, 1829-2015 Carmen M. Reinhart, Harvard University and NBER Christoph Trebesch, University of Munich and CESifo DO NOT DISTRIBUTE – EMBARGOED UNTIL 1:00 PM EST ON 9/10/2015 This draft: September 5, 2015 The Pitfalls of External Dependence: Greece, 1829-2015 Carmen M. Reinhart (Harvard University and NBER) Christoph Trebesch (University of Munich and CESifo) Abstract Two centuries of Greek debt crises highlight the pitfalls of relying on external financing. Since its independence in 1829, the Greek government has defaulted four times on its external creditors, and it was bailed out in each crisis. We show that cycles of external crises and dependence are a perennial theme of Greek modern history – with repeating patterns: prior to the default, there is a period of heavy borrowing from foreign private creditors. As repayment difficulties arise, foreign governments step in, help to repay the private creditors, and demand budget cuts and adjustment programs as a condition for the official bailout loans. Political interference from abroad mounts and a prolonged episode of debt overhang and financial autarky follows. At present, there is considerable evidence to suggest that a substantial haircut on external debt is needed to restore the economic viability of the country. Even with that, a policy priority for Greece is to reorient, to the extent possible, towards domestic sources of funding. *We wish to thank the Josefin Meyer, Michael Papaioannou, Vincent Reinhart, David Romer, and Julian Schumacher for helpful comments and Jochen Andritzky and Stellios Makrydakis for sharing the data from their studies, which we cite here.
    [Show full text]
  • Coping with Disasters
    KIEL WORKING PAPER Coping with Disasters: Two Centuries of International Official Lending No. 2157 June 2020 Sebastia n Horn, Carmen Reinhart and Christoph Trebesch Kiel Institute for the World Economy ISSN 1862 –1155 KIEL WORKING PAPER NO. 2157| JUNE 2020 ABSTRACT COPING WITH DISASTERS: TWO CENTURIES OF INTERNATIONAL OFFICIAL LENDING Sebastian Horn, Carmen Reinhart and Christoph Trebesch This draft: June 9, 20201 Official (government-to-government) lending is much larger than commonly known, often surpassing total private cross-border capital flows, especially during disasters such as wars, financial crises and natural catastrophes. We assemble the first comprehensive long-run dataset of official international lending, covering 230,000 loans, grants and guarantees extended by governments, central banks, and multilateral institutions in the period 1790-2015. Historically, wars have been the main catalyst of government-to-government transfers. The scale of official credits granted in and around WW1 and WW2 was particularly large, easily surpassing the scale of total international bailout lending after the 2008 crash. During peacetime, development finance and financial crises are the main drivers of official cross-border finance, with official flows often stepping in when private flows retrench. In line with the predictions of recent theoretical contributions, we find that official lending increases with the degree of economic integration. In crises and disasters, governments help those countries to which they have greater trade and banking exposure, hoping to reduce the collateral damage to their own economies. Since the 2000s, official finance has made a sharp comeback, largely due to the rise of China as an international creditor and the return of central bank cross-border lending in times of stress, this time in the form of swap lines.
    [Show full text]
  • Sovereign Debt and Financial Crises: Theory and Historical Evidence
    SOVEREIGN DEBT AND FINANCIAL CRISES: THEORY AND HISTORICAL EVIDENCE ¨ S. ebnem Kalemli-Ozcan Carmen Reinhart University of Maryland, CEPR Harvard University and NBER and NBER Kenneth Rogoff Harvard University and NBER This issue of the Journal of the European Economic Association presents papers from the October 2013 conference on Sovereign Debt Crises organized by S. ebnem Kalemli-Ozcan,¨ Carmen Reinhart, and Kenneth Rogoff. This project arose from the need to provide rigorous research on the topic. The so-called “Great Contraction” in the world’s advanced economies is the most severe and synchronized global financial crisis since the Great Depression. It has forced all concerned parties to reassess the roles played by public and private debt, as well as the importance of international financial linkages. Nations in the European Union continue to struggle with a crisis over the debts of periphery countries, most notably Greece but also Ireland, Spain, Portugal, and Italy. The failure of most advanced countries to recover—or to regain pre- crisis levels of employment and growth in its aftermath—raises fears of experiencing the equivalent of Japan’s “lost decade”. In the wake of the crisis, it is clear that the macroeconomic models previously used by central banks and others have severe limitations. In particular, these models do not adequately incorporate financial frictions and are almost always estimated over relatively narrow data sets that do not span financial crises. The recent crisis also raises many other issues, including the links among government and private sector debt, the financial sector, and the political processes governing the resolution of fiscal and financial distress.
    [Show full text]
  • Dealing with Debt Faculty Research Working Paper Series
    Dealing with Debt Faculty Research Working Paper Series Carmen M. Reinhart Harvard Kennedy School Vincent Reinhart American Enterprise Institute Kenneth Rogoff Harvard University February 2015 RWP15-009 Visit the HKS Faculty Research Working Paper Series at: https://research.hks.harvard.edu/publications/workingpapers/Index.aspx The views expressed in the HKS Faculty Research Working Paper Series are those of the author(s) and do not necessarily reflect those of the John F. Kennedy School of Government or of Harvard University. Faculty Research Working Papers have not undergone formal review and approval. Such papers are included in this series to elicit feedback and to encourage debate on important public policy challenges. Copyright belongs to the author(s). Papers may be downloaded for personal use only. www.hks.harvard.edu Dealing with Debt Carmen M. Reinhart*, Vincent Reinhart** and Kenneth Rogoff*** Latest revision: February 15, 2015 Forthcoming , Journal of International Economics (2015) Abstract This paper explores the menu of options for renormalizing public debt levels relative to nominal activity in the long run, should governments eventually decide to do so. Orthodox ones for medium-term debt stabilization, the standard fare of officialdom, include enhancing growth, running primary budget surpluses, and privatizing government assets. Heterodox polices include restructuring debt contracts, generating unexpected inflation, taxing wealth, and repressing private finance. We examine 70 episodes across 22 advanced economies from 1800 to 2014 where there were significant and sustained reductions in public debt relative to nominal GDP. In the event, advanced countries have relied far more on heterodox approaches than many observers choose to remember.
    [Show full text]
  • This Time It's Not Different by Kenneth Rogoff Newsweek International
    Copyright Information From Newsweek International 2/16/04 © 2004 Newsweek, Inc. All rights reserved. Used by permission and protected by the copyright laws of the United States. The laws prohibit any copying, redistribution or retransmission of this material without express written permission from Newsweek. This Time It's Not Different By Kenneth Rogoff Newsweek International Feb. 16 issue - From the way money is now pouring into middle-income countries, like Brazil, China and Turkey, people must believe that we won't see another international debt crisis until the next sighting of Halley's comet. Has everybody forgotten about Mexico (1994); Thailand, South Korea, Indonesia and others (1997); Russia (1998); Brazil (1999); Argentina (2001); Turkey (2001), and Brazil (2002)? They shouldn't. According to a foreboding study issued last fall by the International Monetary Fund (when, incidentally, I was still chief economist there), at least a dozen other emerging markets have more debt than they can handle. Simply put, the average emerging-market country has a debt-to-income burden similar to that of a rich country, pyramided on lower exports and a tax base less than half as large. A recipe for catastrophe. Yes, there are exceptions. Brazil, for example, has gotten pretty good at collecting taxes. And yes, the task of judging whether a country can outgrow its debt burden is not a science. Country defaults have complex social and political dimensions, and I have yet to see any framework that can convincingly name the time or place of the next big crisis. But one didn't have to be Nostradamus to foresee Argentina's recent collapse.
    [Show full text]
  • Is Higher Debt an (Almost) Free Lunch?”
    Is Higher Debt an (Almost) Free Lunch?” By Kenneth Rogoff, Harvard University1 Abstract Faced with a global natural catastrophe, countries must spend to deal with the immediate crisis, and to reduce longer-term economic scarring. Sustained infrastructure and education spending can help counter headwinds to the long-term outlook. However, the fact that government borrowing rates are at extremely low levels does not imply that the very high debt, especially short-term borrowing, is a free lunch. Although real borrowing rates are on a gentle long-term declining trend, current levels are below trend. Massive underfunded old-age transfer and support programs are the most conspicuous form of hidden non-market “junior” debt, but as states cast ever-wider nets of implicit guarantees, they are far from the only ones. The fact that interest rates are below growth rates has long been the norm through advanced economies and emerging markets, but have not been a guarantee of safety. And it seems extremely likely that the rate of return on both public and private investment is comfortably above the growth rate, the world is probably not in an inefficient equilibrium where higher government debt is a free lunch. 1 Economics Department, Harvard University, Cambridge MA 02140 USA. [email protected] This paper was prepared for the European Fiscal Board annual meeting on February 26, 2021. An earlier version, Rogoff (2021), was presented at the American Economic Association meetings in January 2021. 1 I. Introduction The worldwide pandemic has already led a massive increase in government debt, especially in advanced economies.2 In the face of an extraordinary natural catastrophe, the cost/benefit/risk calculus gave few choices.
    [Show full text]
  • Reinhart and Rogoff Are Wrong About Austerity
    website: www.peri.umass.edu The following comment appeared in the April 17, 2013 print edition of the Financial Times. It is available online at http://www.ft.com/intl/cms/s/0/9e5107f8-a75c-11e2-9fbe-00144feabdc0.html#axzz2Qk3zV4ww. Reinhart and Rogoff are wrong about austerity Robert Pollin and Michael Ash In 2010, two Harvard economists published an academic paper that spoke to the world’s biggest policy question: should we cut public spending to control the deficit or use the state to rekindle economic growth? Growth in a Time of Debt by Carmen Reinhart and Kenneth Rogoff has served as an important intellectual bulwark in support of austerity policies in the US and Europe. It has been cited by politicians ranging from Paul Ryan, the US congressman, to George Osborne, the UK chancellor. But we have shown that several critical findings advanced in this paper are wrong. So do we need to rethink austerity economics more broadly? Their research is best known for its result that, across a broad range of countries and periods, economic growth declines dramatically when a country’s level of public debt exceeds 90 per cent of gross domestic product. In their work with a sample of 20 advanced economies in the postwar period, they report that average annual GDP growth ranges between about 3 per cent and 4 per cent when the ratio of public debt to GDP is below 90 per cent. But it collapses to -0.1 per cent when the ratio rises above a 90 per cent threshold. In a new working paper, co-authored with Thomas Herndon, we found that these results were based on data errors and unsupportable statistical techniques.
    [Show full text]
  • Working Paper No. 603 Does Excessive Sovereign Debt Really Hurt Growth? a Critique of This Time Is Different, by Reinhart and Ro
    Working Paper No. 603 Does Excessive Sovereign Debt Really Hurt Growth? A Critique of This Time Is Different, by Reinhart and Rogoff by Yeva Nersisyan L. Randall Wray June 2010 The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. Levy Economics Institute P.O. Box 5000 Annandale-on-Hudson, NY 12504-5000 http://www.levyinstitute.org Copyright © Levy Economics Institute 2010 All rights reserved ABSTRACT The worst global downturn since the Great Depression has caused ballooning budget deficits in most nations, as tax revenues collapse and governments bail out financial institutions and attempt countercyclical fiscal policy. With notable exceptions, most economists accept the desirability of expansion of deficits over the short term but fear possible long-term effects. There are a number of theoretical arguments that lead to the conclusion that higher government debt ratios might depress growth. There are other arguments related to more immediate effects of debt on inflation and national solvency. Research conducted by Carmen Reinhart and Kenneth Rogoff is frequently cited to demonstrate the negative impacts of public debt on economic growth and financial stability. In this paper we critically examine their work.
    [Show full text]
  • Macroeconomic Challenges: the Decade Ahead– an Introduction to the 2010 Economic Policy Symposium
    Macroeconomic Challenges: The Decade Ahead– An Introduction to the 2010 Economic Policy Symposium Craig S. Hakkio and Edward S. Knotek II In the late spring of 2009, the world economy began to recover from the deepest global recession of the post-World War II era. In a number of countries where the housing crash and financial crisis still reverberate, particularly the United States, the pace of economic growth has been moderate in the first year of the recovery, contrast- ing with the historical relationship between the depth of recessions and strength of recoveries. As a consequence, policymakers continue to seek ways to stem the fallout from the crisis, promote a faster re- covery, and prevent a recurrence of these events. During the depths of the crisis, normal monetary policy instru- ments were pushed to their limits in some countries, giving way to unconventional policy actions that have left central banks with ex- panded balance sheets. Going forward, when and how to unwind these actions remain important topics of debate. In addition, the se- verity of the crisis has again raised questions about whether central banks should actively fight asset bubbles and, if so, the proper tools to use. Fiscal policy has also come under renewed scrutiny. In a number of countries, budget deficits have grown dramatically, partly as a result of capital injections, countercyclical stimulus and automatic xxi xxii Craig S. Hakkio and Edward S. Knotek II stabilizers. These large deficits will need to be unwound to prevent the types of sovereign debt crises that have affected the periphery of the euro zone.
    [Show full text]
  • Nber Working Paper Series Capital Flow Bonanzas
    NBER WORKING PAPER SERIES CAPITAL FLOW BONANZAS: AN ENCOMPASSING VIEW OF THE PAST AND PRESENT Carmen M. Reinhart Vincent R. Reinhart Working Paper 14321 http://www.nber.org/papers/w14321 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 September 2008 The authors wish to thank Jeff Frankel, Francisco Giavazzi, Alejandro Izquiredo, Frank Warnock, and other participants for helpful comments. Meagan Berry, Adam Paul, and Anna Stumpf provided excellent research assistance. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2008 by Carmen M. Reinhart and Vincent R. Reinhart. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Capital Flow Bonanzas: An Encompassing View of the Past and Present Carmen M. Reinhart and Vincent R. Reinhart NBER Working Paper No. 14321 September 2008 JEL No. F30,F32,F34 ABSTRACT A considerable literature has examined the causes, consequences, and policy responses to surges in international capital flows. A related strand of papers has attempted to catalog current account reversals and capital account "sudden stops." This paper offers an encompassing approach with an algorithm cataloging capital inflow bonanzas in both advanced and emerging economies during 1980-2007 for 181 countries and 1960-2007 for a subset of 66 economies from all regions.
    [Show full text]
  • Speaker Biographies
    NEW APPROACHES TO ECONOMIC CHALLENGES (NAEC) A Systemic Recovery Biographies 28 April 2021 - 15.00-18.00 (CET) / 9.00-12.00 (EST) Virtual Conference - OECD Conference Centre, Paris Further information: William Hynes – [email protected] NEW APPROACHES TO ECONOMIC CHALLENGES (NAEC) OECD Angel Gurria Secretary General of the OECD As Secretary-General of the Organisation of Economic Co-operation and Development (OECD) since 2006, Angel Gurría has firmly established the Organisation as a pillar of the global economic governance architecture including the G7, G20 and APEC, and a reference point in the design and implementation of better policies for better lives. He has broadened OECD’s membership with the accession of Chile, Estonia, Israel, Latvia and Slovenia, and has made the Organisation more inclusive by strengthening its links with key emerging economies. Under his watch, the OECD is leading the effort to reform the international tax system, and to improve governance frameworks in anti-corruption and other fields. He has also heralded a new growth narrative that promotes the well-being of people, including women, gender and youth, and has scaled up the OECD contribution to the global agenda, including the Paris Agreement on Climate Change and the adoption of the Sustainable Development Goals Born in Mexico, Mr. Gurría came to the OECD following a distinguished career in public service in his country, including positions as Minister of Foreign Affairs and Minister of Finance and Public Credit in the 1990s. Mr. Gurría holds a B.A. degree in Economics from UNAM (Mexico) and a M.A. degree in Economics from Leeds University (United Kingdom).
    [Show full text]