Sovereign Default in the US
24 Pages Posted: 15 Mar 2016
Date Written: March 14, 2016
In the absence of a judicial mechanism to reduce the debt burden of a sovereign member of our Union, the resolution process can be quick but perhaps too indifferent to the health, safety, and welfare of the affected residents. In this paper, I use evidence from the Arkansas state archives to provide a description of the events surrounding the default of the state in 1933. I examine the evolution of the negotiations, the outcomes, and the role of fiscal policy.
Keywords: sovereign default, municipal bankruptcy, Great Depression, Arkansas highway bonds
JEL Classification: N22, H74, G01, K10
Suggested Citation: Suggested Citation