The Welfare Cost of Argentine Risk

In this paper we do a couple of things: discussing a way to measure the welfare cost of country risk, and measuring it for Argentina in the period 1875-2006. There are two conclusions: a) the welfare cost of Argentine risk has been huge: for example, in the period 1976-2006 it was around 20% of GDP, several times larger than the welfare cost of any conventional distortion; b) this cost would be wholly paid by labor. These fascinating results deserve further investigation

Empirical Research on Sovereign Debt and Default

The long history of sovereign debt and the associated enforcement problem have attracted researchers in many fields. In this paper, we survey empirical work by economists, historians, and political scientists. As we review the empirical literature, we emphasize parallel developments in the theory of sovereign debt. One major theme emerges. Although recent research has sought to balance theoretical and empirical considerations, there remains a gap between theories of sovereign debt and the data used to test them. We recommend a number of steps that researchers can take to improve the correspondence between theory and data

Current understanding of the relationship between cervical manipulation and stroke: what does it mean for the chiropractic profession?

The understanding of the relationship between cervical manipulative therapy (CMT) and vertebral artery dissection and stroke (VADS) has evolved considerably over the years. In the beginning the relationship was seen as simple cause-effect, in which CMT was seen to cause VADS in certain susceptible individuals. This was perceived as extremely rare by chiropractic physicians, but as far more common by neurologists and others. Recent evidence has clarified the relationship considerably, and suggests that the relationship is not causal, but that patients with VADS often have initial symptoms which cause them to seek care from a chiropractic physician and have a stroke some time after, independent of the chiropractic visit

Sovereign Debt: Indexation and Maturity

In this paper we review the literature on sovereign debt with particular emphasis on indexation and maturity and the main policy proposals related to these topics. We also advance some implications derived from our work. In Alfaro and Kanczuk (2005a, b, c), we modeled sovereign debt as a contingent claim following the framework developed by Grossman and Van Huyck (1988). Our framework, however, recognizes that contingent debt might be associated with incentive problems. Applying this framework to the study of the sustainability of sovereign debt, the tradeoff between nominal and indexed debt, and the optimal debt maturity, we find some of the proposals advanced in the literature regarding lengthening debt maturity and issuing nominal debt to be unsustainable in emerging (volatile) economies