## The Costs of Sovereign Default

_IMF Working Papers, October 1, 2008_

## Source details

**Canonical URL:** [The Costs of Sovereign Default](https://www.imf.org/en/publications/wp/issues/2016/12/31/the-costs-of-sovereign-default-22346)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/the-costs-of-sovereign-default-22346/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/the-costs-of-sovereign-default-22346/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/the-costs-of-sovereign-default-22346/bundle-manifest.json)

## Bibliographic details
- Authors: Eduardo Borensztein, Ugo Panizza
- Published: October 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451870961.001

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### Key themes
- Four types of cost from an international sovereign default examined:
  - reputational costs
  - international trade exclusion costs
  - costs to the domestic economy through the financial system
  - political costs to the authorities

### Principal findings
- The economic costs are generally significant but short-lived.
- Economic costs sometimes do not operate through conventional channels.
- Political consequences of a debt crisis are particularly dire for incumbent governments and finance ministers.
- Political effects are broadly in line with what happens in currency crises.

### Publication and metadata
- Title: The Costs of Sovereign Default
- Authors: Eduardo Borensztein, Ugo Panizza
- Date: October 1, 2008
- Series: Working Paper No. 2008/238
- Issue: 238
- Volume: 2008
- Pages: 50
- DOI: https://doi.org/10.5089/9781451870961.001
- Stock No: WPIEA2008238
- ISBN: 9781451870961
- ISSN: 1018-5941
- Preview citation (format: Chicago): Eduardo Borensztein, and Ugo Panizza. "The Costs of Sovereign Default", IMF Working Papers 2008, 238 (2008), accessed 9/11/2026, https://doi.org/10.5089/9781451870961.001

### Subjects and keywords
- Subject: Bank credit, Banking crises, Credit ratings, Debt default, Trade credits
- Keywords: default dummy, default episode, default history, WP

*IMF Working Papers — The Costs of Sovereign Default (Working Paper No. 2008/238)*

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## Content in this bundle

- **Default Episodes**
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  - [Default Episodes (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08238.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-costs-of-sovereign-default-22346_