May 6th, 2021

Restructuring Sovereign Debt

An interview with Ken Shadlen

Ken Shadlen's research examines how international institutions can create unique challenges for developing countries and, in doing so exacerbate core-periphery inequalities. Writing on the HIV/AIDS crisis, Shadlen has illustrated how intellectual property rules developed by the World Trade Organization threaten to limit the supply of antiretrovirals, with profound implications for patients in the developing world. In his 2017 book, he finds that countries which had well developed pharmaceutical sectors prior to the WTO’s Agreement on Trade-Related Intellectual Property Rights (TRIPS) did not adopt the sort of maximalist patent regimes that were demanded of less-developed nations. Across his work, Shadlen explores how political blocking and coalition building by developing countries strengthened their influence within the WTO in the late twentieth century.

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August 15th, 2020

Another Lost Decade?

The systemic character of the global periphery debt crisis

Contrary to common beliefs on fiscal fundamentals, the current debt crisis in the global periphery demonstrates that the solvency of sovereign states is critically determined by their monetary power. Crucially, liquidity has a cyclical character in the periphery of global capitalism and a countercyclical character in the core.

During economic booms, when many contracts look safe, private actors are more prone to purchase assets denominated in peripheral currencies, which typically reward higher interest rates. But during busts, perceptions of asset safety may quickly change. Peripheral currency states are more vulnerable to suffering quick withdrawals from contracts denominated in their currency. Private investors seek the safest assets in the global economy, which, despite lower interest rates, guarantee low credit and market risks, high market liquidity, and limited inflation, exchange rate and idiosyncratic risks.

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