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Other People's MoneyDebt Denomination and Financial Instability in Emerging Market Economies$
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Barry Eichengreen and Ricardo Hausmann

Print publication date: 2005

Print ISBN-13: 9780226194554

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226194578.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 08 December 2021

How Original Sin Was Overcome

How Original Sin Was Overcome

The Evolution of External Debt Denominated in Domestic Currencies in the United States and the British Dominions, 1800–2000

Chapter:
(p.122) 5 How Original Sin Was Overcome
Source:
Other People's Money
Author(s):
Michael D. Bordo, Christopher M. Meissner, Angela Redish
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226194578.003.0006

This chapter presents an historical case study for a group of countries that successfully entered the club and had largely overcome the problem of original sin by the third quarter of the twentieth century. The group consists of several former colonies of Great Britain: the United States, Canada, Australia, New Zealand, and South Africa. The chapter traces out their debt history, relating the currency to the place of issue, exploring the residency of those holding local- and foreign-currency debt, and looking at the maturity of domestic debt in the nineteenth and twentieth centuries. U.S. sovereign debt had implicit or explicit gold clauses until 1933. States and corporations borrowed completely in dollars only by the late nineteenth century and always did so with gold clauses until the gold standard was finally abandoned.

Keywords:   original sin, Great Britain, United States, Canada, Australia, New Zealand, South Africa, domestic debt, currency, gold clauses

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