Emerging Markets and Financial Globalization：Sovereign Bond Spreads in 1870-1913 and Today

Thefrequencyandvirulenceofrecentfinancialcriseshaveledtocallsforreformofthecurrentinternationalfinancialarchitecture.Inanefforttolearnmoreabouttoday'sinternationalfinancialenvironment,theauthorsturntoanearliereraoffinancialglobalizationbetween1870and1913.Byexaminingdataonsovereignbondsissuedbyborrowingdevelopingcountriesinthisearlierperiodandinthepresentday,theauthorsareabletoidentifythecharacteristicsofsuccessfulborrowersinthetwoperiods.Theyarethenabletoshowthatglobalcrisesorcontagionareafeatureofthe1990swhichwashardlyknowninthepreviouseraofglobalization.Finally,theauthorsdrawlessonsfortodayfromarchivaldataonmechanismsusedbyBritishinvestorsinthe19thcenturytoaddresssovereigndefaults.Usingnewqualitativeandquantitativedata,theauthorsskillfullyapplyavarietyofapproachesinordertobetterunderstandhowproblemsofvolatilityanddebtcrisesaredealtwithininternationalfinancialmarkets.