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Sovereign Debt in Latin America, 1820-1913

43 Pages Posted: 8 Sep 2012  

Gerardo della Paolera

American University of Paris

Alan M. Taylor

University of California, Davis - Department of Economics; University of Virginia - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: September 2012

Abstract

This paper examines sovereign lending to Latin America and the Caribbean from 1820 to 1913. We examine four waves of capital flows where defaults were followed by a return to market access. In spite of extended default, countries kept promising high returns that attracted international investors again and again: financial autarky thus gave way to eras of high integration to global markets as measured by sovereign risk pricing. We discuss imperfections of the sovereign debt institutional context in the region and discuss a menu of options that some countries used to seek funds in the global financial markets after defaults. The parallel with the modern Latin American and Caribbean sovereign bond market experience is striking.

Suggested Citation

della Paolera, Gerardo and Taylor, Alan M., Sovereign Debt in Latin America, 1820-1913 (September 2012). NBER Working Paper No. w18363. Available at SSRN: https://ssrn.com/abstract=2143550

Gerardo Della Paolera (Contact Author)

American University of Paris ( email )

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Alan M. Taylor

University of California, Davis - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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