... countries.19in credit to the nonfinancial sector during debt renegotiations is only due to a decline in the non–exporting sector. On the other hand, the decline in the aftermath of the debt restructuringagreement ... decline in total credit in the economy and may partiallyexplain the decline in economic activity observed after s overeign debt crises. 28 Sovereign Debt Crises and Credit to the Private Sector Carlos ... decrease the private sector s demand for credit, as described above, and at the same timelead to a decline in government revenues and therefore to a sovereign debt crisis.Furthermore, both a sovereign...