Professor Weidenmier Awarded NSF Grant For Emerging Market Default Study

Associate Professor of Economics Marc Weidenmier, in collaboration with Assistant Professor Kris Mitchener of Santa Clara University, has been awarded a grant totaling nearly $350,000 over three years from the National Science Foundation for their project, Sovereign Debt Default, Empire, and Trade During the Gold Standard (1870-1913).

The project examines in historical perspective the problem of emerging or lesser-developed countries defaulting on external debts, with particular attention to two key issues: a country’s willingness to pay back its debts, and its ability to repay, including public policy implications.

Within the scope of their work, Weidenmier and Mitchener will investigate which options used by defaulting countries have been successful, and which have not, including debt sanctions and variables such as whether different types of exchange rate regimes promote international trade, and whether adopting a single money medium, such as the Euro, boosts trade and investment.

Weidenmier, whose research interests also include monetary and financial history, applied time series econometrics, and public choice, says the NSF grant is a generous award for a social science grant.

As an extension of their research, approximately one million observations on trade and bond prices are expected to be collected and posted to a Web site dedicated to the collaborative project: www.classicalgoldstandard.org. “To my knowledge,” Weidenmier says, “it will be the world’s largest sovereign debt database and largest bilateral trade database from the Classical Gold Standard Era.”

Weidenmier graduated Phi Beta Kappa from the College of William and Mary, and earned his doctorate degree from the University of Illinois. He is a Faculty Research Fellow for the National Bureau of Economic Research.