CEPR paper identifies root cause of sovereign debt crises
A Centre for Economic Policy Research paper, published on Monday, shows that high levels of indebtedness is the main cause of a sovereign debt crisis.
Daniel Cohen and Cécile Valadier, the paper's authors, have compiled a new database to assess the causes of sovereign debt crises over the last 40 years.
Cohen and Valadier find that sovereign debt crises owed mostly to the level of indebtedness of the countries, accounting for about half of the risk factor. Meanwhile, 25% of the remainder of the
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