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Other People's Money
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Other People's Money: Debt Denomination and Financial Instability in Emerging Market Economies

Barry Eichengreen and Ricardo Hausmann


Recent crises in emerging markets have been heavily driven by balance-sheet or net-worth effects. Episodes in countries as far-flung as Indonesia and Argentina have shown that exchange rate adjustments that would normally help to restore balance can be destabilizing, even catastrophic, for countries whose debts are denominated in foreign currencies. Many economists instinctually assume that developing countries allow their foreign debts to be denominated in dollars, yen, or euros because they simply don't know better. Presenting evidence that even emerging markets with strong policies and inst ... More

Keywords: emerging markets, exchange rate adjustments, foreign debts, net-worth effects, international financial markets, World Bank, regional development banks, currencies, crises, balance sheet

Bibliographic Information

Print publication date: 2005 Print ISBN-13: 9780226194554
Published to Chicago Scholarship Online: February 2013 DOI:10.7208/chicago/9780226194578.001.0001


Affiliations are at time of print publication.

Barry Eichengreen, editor

Ricardo Hausmann, editor

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Barry Eichengreen and Ricardo Hausmann

1. The Pain of Original Sin

Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza

2 Must Original Sin Cause Macroeconomic Damnation?

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3 A Fiscal Perspective on Currency Crises and Original Sin

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5 How Original Sin Was Overcome

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8 Why Do Countries Borrow the Way They Borrow?

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9 The Mystery of Original Sin

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10 Original Sin

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End Matter