After sovereign default, countries face higher borrowing costs and limited market access.
The article explores how countries decide to save money and whether to default on their debts. The researchers found that after a country defaults on its debt, it becomes harder for them to borrow money in the future. This leads to higher interest rates on loans, less money coming into the country, and a slow recovery in borrowing. The study also looks at how different political parties in power can affect these decisions.