TY  - JOUR
AU  - Qian, Rong
AU  - Reinhart, Carmen M
AU  - Rogoff, Kenneth S
TI  - On Graduation from Default, Inflation and Banking Crisis:  Elusive or Illusion?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16168
PY  - 2010
Y2  - July 2010
DO  - 10.3386/w16168
UR  - http://www.nber.org/papers/w16168
L1  - http://www.nber.org/papers/w16168.pdf
N1  - Author contact info:
Rong Qian
University of Maryland
Department of Economics
Tydings Hall
College Park, MD 20742
E-Mail: rqian@worldbank.org

Carmen M. Reinhart
Kennedy School of Government
Harvard University
79 JFK Street
Cambridge, MA 02138
Tel:  617 496 8643
E-Mail: carmen_reinhart@harvard.edu

Kenneth S. Rogoff
Thomas D Cabot Professor of Public Policy
Economics Department
Harvard University
Littauer Center 216
Cambridge, MA 02138-3001
Tel: 617-495-4022
Fax: 617/495-7730
E-Mail: krogoff@harvard.edu
M1  - published as Rong Qian, Carmen M. Reinhart, Kenneth S. Rogoff. "On Graduation from Default, Inflation and Banking Crises: Elusive or Illusion?," in Daron Acemoglu and Michael Woodford, editors, "NBER Macroeconomics Annual 2010, Volume 25" University of Chicago Press (2011)

AB  - This paper uses a data set of over two hundred years of sovereign debt, banking and inflation crises to explore the question of how long it takes a country to "graduate" from the typical pattern of serial crisis that most emerging markets experience.  We find that for default and inflation crises, twenty years is a significant market, but the distribution of recidivism has extremely fat tails. In the case of banking crises, it is unclear whether countries ever graduate.  We also examine the more recent phenomenon of IMF programs, which sometimes result in "near misses" but sometimes end in default even after a program is instituted.  The paper raises the important theoretical question of why countries experience serial default, and how they might graduate.
ER  -