Management Research Seminar : Sovereign Default and Political Turnover
Friday, March 18, 2016, 9:30 a.m. to 11:30 a.m.
Igor Livshits, PhD
Academic Director of Belarusian Economic Research and Outreach Center
University of Western Ontario
- Friday, March 18, 2016
- 9:30 a.m. to 11:30 a.m.
- Telfer School of Management
55 Laurier Avenue East
Ottawa, Ontario K1N 6N5
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About the Presentation
In this presentation, we investigate whether the onset of a sovereign default is associated with an increase in the probability that incumbent politicians lose office. We construct a novel dataset of finance ministers tenure and turnover for 84 countries between 1980 and 2012. We find robust evidence that sovereign default onsets are associated with statistically and economically significant increases in the probability of finance minister turnover. The evidence regarding chief executive turnover is mixed. We offer a simple “scapegoat” theory that is consistent with these observations: the executive of a defaulting country can avoid being replaced by putting blame on the finance minister or the central bank governor and replacing them.
About the Speaker
Igor Livshits is an Associate Professor of Economics at the University of Western Ontario and the Academic Director of Belarusian Economic Research and Outreach Center. He has obtained a Masters degree in Policy Economics from the University of Illinois in 1997 and his Ph.D. in Economics from the University of Minnesota in 2002. He has received grants from the Arts, Humanities and Social Sciences Fund at Western in 2003 and 2004, from the Social Sciences and Humanities Research Council of Canada in 2005, 2008, and 2015, and from the Office of Superintendent for Bankruptcy in 2011. He has held visiting research positions at Arizona State University, Federal Reserve Bank of Philadelphia, Collegio Carlo Alberto in Turin, and Universitat Pompeu Fabra in Barcelona. He was a Scholar with the Canadian Institute for Advanced Research from 2005 to 2009.
Dr. Livshits' most visible research is on personal bankruptcies and consumer debt. His papers with J. MacGee and M. Tertilt have been published in the American Economic Review, American Economic Journal Macroeconomics, and the Review of Economic Studies, and his paper with N. Kovrijnykh is forthcoming in the International Economic Review. He has also contributed a survey on the subject to the Journal of Economic Surveys. Dr. Livshits’ other research interests include sovereign debt and default, political economy, investment in human capital, and economic growth and development. These interests are reflected in publications in the Journal of Monetary Economics, Journal of Economic Theory, and a number of working papers.