You are naive.
Argentina is a serial defaulter, every decade or so it defaults on it's debt.
The next day creditors line up to give it money again.
It's hilarious.
https://ftalphaville.ft.com/2019/04/30/1556614127000/Why-inv...
Argentina is a serial defaulter, every decade or so it defaults on it's debt.
The next day creditors line up to give it money again.
It's hilarious.
https://ftalphaville.ft.com/2019/04/30/1556614127000/Why-inv...
I agree that state-level credit dynamics are unique, but playing like they don’t matter at all typically lands one into trouble.
Because in order to develop an industry you need investments and protection of the new industry until it's able to compete. Investment can't be only in your currency because you need to import things for the new industry. And protection is "discouraged" by those that are already developed (1).
(1)[pdf] - http://www.personal.ceu.hu/corliss/CDST_Course_Site/Readings...
Because if you are Argentina (a country with little industry and exports) and you get a debt in Dollars in order to be able to import, of course you can get in the situation where you have to default your debt in a foreign denominated currency.
At what rate? In what currency?