Show Summary Details

Page of

Printed from Oxford Research Encyclopedias, Economics and Finance. Under the terms of the licence agreement, an individual user may print out a single article for personal use (for details see Privacy Policy and Legal Notice).

date: 23 April 2024

Sovereign Debt: Theorylocked

Sovereign Debt: Theorylocked

  • Vivian Zhanwei YueVivian Zhanwei YueDepartment of Economics, Emory University; Research Department, Federal Reserve Bank of Atlanta
  •  and Bin WeiBin WeiResearch Department, Federal Reserve Bank of Atlanta


This article reviews the literature on sovereign debt, that is, debt issued by a national government. The defining characteristic of sovereign debt is the limited mechanisms for enforcement. Because a sovereign government does not face legal consequences of default, the reasons why it makes repayment are to avoid default penalties related to reputation loss or economic cost. Theoretical and quantitative studies on sovereign debt have investigated the cause and impact of sovereign default and produced analysis of policy relevance. This article reviews the theories that quantitatively account for key empirical facts about sovereign debt. These studies enable researchers and policy makers to better understand sovereign debt crises.


  • International Economics

You do not currently have access to this article


Please login to access the full content.


Access to the full content requires a subscription