A Comparative Study On The Causes Of Emerging Economies And Developed Sovereign Debt Crisis

From1980to2009, sovereign-debt crisis from spreading to developedeconomies in emerging economies.1980s Latin America is a major area of thesovereign-debt crisis. Argentina, and Brazil and Mexico and other Latin Americacountries have experienced a violent impact, and over the past few years, anddeveloped economies of European sovereign debt crisis broke. Leading to what wasthe cause of the sovereign debt crisis, leading emerging economies and developedeconomies of the sovereign debt crises are the same. What is the difference, is thepurpose of this study. Emerging economies and developed economies ’ sovereign-debtcrisis genetic similarities and differences. Emerging economies and huge debt burdensare important reasons for the sovereign-debt crisis in advanced economies.Sovereign debt of emerging economies and improved economies causes thedifference is determined by the domestic economy and the international economicenvironment that face them differently. Result in emerging and developed economies,sovereign debt crisis and the domestic monetary situation, the worldwide economicenvironment are closely related.Emerging economic context, analysis by the1980s Latin American debt crisis,for example. Latin America national in out has colonial ruled yǐ hòu, economic shàng achieved has fast development, they seeks to itself of reform innovation alternativecolonists legacy xià of old economic system, but failed to made expected effect,economic structure appeared deviation, and for pursuit economic national economichigh-speed development, take and domestic actual inconsistent of "three high" policy,and due to domestic underfunded, only to borrowed external debt of way raised fundsfor investment, but and due to investment structure not reasonable, and returns lowled to funds recycling difficult, eventually led to debt. In addition, coincided with theoil crisis in the world, developed countries seek scapegrace, while Latin Americancountries import substitution policies, implementing protectionist policies ofdeveloped countries in the West, making Latin American countries did not receive funding not only will cause hurt their interests, in Mexico after the Governmentannounced that it stopped servicing its foreign debt, Latin American sovereign-debtcrisis broke out.In advanced economies, Greece, and Ireland, such as the PIIGS debt crisis, forexample, after decades of development in these countries, the economic situation inthe country has stabilized, domestic industrial layout has also been formed. If it is notthe financial crisis of2008, developed countries ’ debt problems will probablycontinue to hide Greece’s sovereign debt was due to the Government’s intention toconceal, that debt accumulation levels will exceed its capacity to repay debt,sovereign debt crises lead in Greece. And Ireland, and Italy, and Portugal and Spainsovereign debt crisis broke out in four countries.Scholars on the causes of the five countries’ sovereign debt crisis found thatEurope’s sovereign debt crisis is the result of the State in the economy and theinternational economic environment. Judging from the domestic monetary conditions:1) these five countries are welfare States, and huge welfare spending;2) unreasonabledomestic industry structure, the Government’s fiscal deficit, annual deficit;3)Government to borrow heavily. Judging by the international economic environment:1)the impact of the financial crisis;2) international credit-rating agencies helped.Overall, a huge amount of debt is sovereign debt.Overall, a huge amount of debt a sovereign debt crisis, the most prominentreason, domestic economic conditions and the impact of the global economicenvironment is also crucial. According to above theory, paper selected contains debtvolume and both at home and abroad economic factors of seven a indicators--debt(government debt or external debt total) accounted for GDP percentage, and economicgrowth, and Government financial deficit, and inflation, and aging degree, andExchange total reserves and net exports as explained variable, to crisis whetheroutbreak as was explained variable, on data for return obtained results, and accordingto empirical analysis results compared emerging economic body and developedeconomic body sovereignty debt crisis causes of similarities and differences, obtainedfollowing conclusions: First, Emerging and advanced economies are the subject of the sovereign debtcrisis debt. Huge amount of debts leads to debt repayment difficulties, default risk isan important cause of the debt crisis broke out.Second, inflation and international reserves have significant effects on emergingeconomies, no significant effects on developed economies. More serious sovereigndebt risk, the greater the rate of inflation, higher international reserves, sovereign debtrisk is less likely to occur.Third, fiscal deficits and aging on the cause of the sovereign-debt crisis inadvanced economies, while emerging economies there were no noteworthy effect ofthe debt crisis broke out. Higher the level of fiscal deficits, aging, the higher thehigher the risk of a sovereign debt crisis.