Sovereign Default in the US
In the absence of a judicial mechanism to reduce the debt burden of a sovereign member of our Union, the resolution process can be quick but perhaps too indifferent to the health, safety, and welfare of the affected residents. In this paper, I use evidence from the Arkansas state archives to provide a description of the events surrounding the default of the state in 1933. I examine the evolution of the negotiations, the outcomes, and the role of fiscal policy.
Ergungor, O. Emre. 2016. “Sovereign Default in the US.” Federal Reserve Bank of Cleveland, Working Paper No. 16-09. https://doi.org/10.26509/frbc-wp-201609