To: TobagoJack who wrote (75324 ) 6/20/2011 10:29:25 PM From: carranza2 Respond to The French book is a subset of this:nber.org Looking forward, once cannot fail to note that whereas one and two decade lulls in defaults are not at all uncommon, each lull has invariably been followed by a new wave of default. As we shall see when we tabulate individual country experiences in Section IV, serial default on external debt—that is, repeated sovereign default—is the norm throughout every region in the world, even including Asia and Europe. There is a view today that both countries and creditors have learned from their mistakes. Thanks to better-informed macroeconomic policies and more discriminating lending practices, it is argued, the world is not likely to again see a major wave of defaults. Indeed, an often-cited reason these days why “this time it’s different” for the emerging markets is that governments there are relying more on domestic debt financing. Such celebration may be premature. Capital flow/default cycles have been around since at least 1800—if not before. Technology has changed, the height of humans has changed, and fashions have changed. Yet the ability of governments and investors to delude themselves, giving rise to periodic bouts of euphoria that usually end in tears, seems to have remained a constant.
