## Trade Dynamics in Sovereign Debt Crises

_IMF Working Papers, November 14, 2025_

## Source details

**Canonical URL:** [Trade Dynamics in Sovereign Debt Crises](https://www.imf.org/en/publications/wp/issues/2025/11/14/trade-dynamics-in-sovereign-debt-crises-571861)

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## Bibliographic details
- 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

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### Key findings
- 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:
  - Restructurings that preempt a default have different trade outcomes than restructurings that take place after payments have been missed.
  - Post-default restructurings are associated with longer and deeper crises.
- 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.

### Methodological and thematic notes
- 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.

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_Source: https://www.imf.org/en/publications/wp/issues/2025/11/14/trade-dynamics-in-sovereign-debt-crises-571861_