{
  "title": "Trade Dynamics in Sovereign Debt Crises",
  "publication": "IMF Working Papers, November 14, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2025/11/14/trade-dynamics-in-sovereign-debt-crises-571861",
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  "summary": "Sovereign debt restructurings can have large impacts on trade, with a significant compression of imports and a more ambiguous effect on exports.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Sovereign debt restructurings can have large impacts on trade, with a significant compression of imports and a more ambiguous effect on exports.\n- The magnitude of trade impacts depends on timing:\n  - Restructurings that preempt a default have different trade outcomes than restructurings that take place after payments have been missed.\n  - Post-default restructurings are associated with longer and deeper crises.\n- Import compression is significantly higher following post-default restructurings.\n- Post-default restructurings also tend to be associated with higher exports relative to preemptive restructurings, consistent with the need for a larger external adjustment following a default.\n- The effect of restructurings on trade varies across types of goods.\n- The trade impact is larger when initial aggregate domestic demand in the debtor’s economy is high."
    },
    {
      "heading": "Methodological and thematic notes",
      "content": "- Subject areas: Asset and liability management, Debt restructuring, Exports, Imports, International trade, Public debt, Sovereign debt restructuring.\n- Keywords: Aipw estimation; Debt restructuring; Domestic Aggregate Demand; Export; Exports; Global; IMF working papers; Imports; Primary Commodity; Sovereign Debt; Sovereign Debt Restructuring; Sovereign Default; Trade; trade datum; trade dynamics.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/11/14/trade-dynamics-in-sovereign-debt-crises-571861"
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    "Authors: Tamon Asonuma, Marcos Chamon, Yasumasa Morito, Akira Sasahara",
    "Published: November 14, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229027403.001",
    "Sovereign debt restructurings can have large impacts on trade, with a significant compression of imports and a more ambiguous effect on exports.",
    "The magnitude of trade impacts depends on timing:",
    "Import compression is significantly higher following post-default restructurings.",
    "Post-default restructurings also tend to be associated with higher exports relative to preemptive restructurings, consistent with the need for a larger external adjustment following a default.",
    "The effect of restructurings on trade varies across types of goods.",
    "The trade impact is larger when initial aggregate domestic demand in the debtor’s economy is high.",
    "Subject areas: Asset and liability management, Debt restructuring, Exports, Imports, International trade, Public debt, Sovereign debt restructuring.",
    "Keywords: Aipw estimation; Debt restructuring; Domestic Aggregate Demand; Export; Exports; Global; IMF working papers; Imports; Primary Commodity; Sovereign Debt; Sovereign Debt Restructuring; Sovereign Default; Trade; trade datum; trade dynamics.",
    "**Working Paper**"
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