Date of Award

Summer 8-13-2020

Author's School

Olin Business School


Olin Business School- Finance

Degree Name

Doctor of Business

Degree Type



Sovereign debt default can have significant economic, social, and reputational costs. For this reason, policy makers across the globe are constantly trying to balance fiscal policy and economic growth. Many of them, however, are still unable to do so and fall into sovereign debt default. This research paper looks at 52 sample countries from 1980 to 2018 and examines whether sovereign debt default can be explained by the gap between GDP growth and interest rates and/or debt-to-GDP levels. Through a series of empirical analysis, I find that if GDP growth is higher than interest rates, risk of default is typically reduced in sample countries. Moreover, I also find that increases in debt to GDP are positively correlated to risk of default.

Chair and Committee

Barton Hamilton, Asaf Manela, Anjan Thakor