Working Paper

Sovereign Default in the US

Abstract: 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.

Keywords: Arkansas highway bonds; Great Depression; municipal bankruptcy; sovereign default;

JEL Classification: N22; K10; G01; H74;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 2016-04-06

Number: 1609

Pages: 24 pages