Thursday, May 6, 2010

PIIGS and Sovereign Debt Crises

Ken Rogoff is the expert on this, and here’s what he thinks about Greece (right now) and other countries more generally.

Economists have only a limited understanding of why sovereign nations ever repay their external debt, given the lack of any supranational legal authority that might force them to do so. It is very rare for a country to default because it literally cannot pay. In most cases, and certainly in southern Europe today, the issue is willingness to pay.

Via Marginal Revolution.

No comments:

Post a Comment