Sovereign Debt Issuance under Domestic Law

In the second of his Munich Lectures in Economics, Kenneth Rogoff discussed financial crises. (His first and third lecture covered a proposal to phase out cash, see my post.)

In addition to reviewing his work with Carmen Reinhart, Rogoff returned to an earlier proposal (Bulow and Rogoff 1990, Journal of Economic Perspectives) according to which sovereigns should issue public debt under domestic law. This would avoid complications in an eventual debt restructuring process but would also make it harder to issue debt in the first place.

Rogoff reminded his audience that not only developing countries are and were subject to IMF programs; advanced economies were too (e.g., the UK in the 1950s).