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Do countries “graduate” from crises? Some historical perspective

By Carmen Reinhart, Rong Qian and Kenneth Rogoff

Abstract

The widespread banking crises since 2007 among advanced economies and the “near” default of Greece in 2010 dashed the popular notion that rich countries have outgrown severe financial crises. Record or near-record declines in output accompanying these events signaled the end of the short-lived “great moderation era.” In fact, graduation from recurring sovereign external debt crises is a very tortuous process that sometimes takes a century or more. For banking crises, we simply do not know what it takes to graduate; it is unclear whether any country has managed it.

Topics: E0 - General, F3 - International Finance, N0 - General
Year: 2010
OAI identifier: oai:mpra.ub.uni-muenchen.de:24761

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