Exchange rate policy under sovereign default risk

Andreas Schabert

We examine monetary policy options for a small open economy where sovereign default might occur due to intertemporal insolvency. Under interest rate policy and floating exchange rates the equilibrium is indetermined. Under a fixed exchange rate the equilibrium is uniquely determined and independent of sovereign default.

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Year of publication:	2011
Authors:	Schabert, Andreas
Publisher:	Rotterdam [u.a.] : Tinbergen Inst.
Subject:	Exchange rate peg \| interest rate policy \| equilibrium determination \| sovereign default \| public debt \| Öffentliche Schulden \| Public debt \| Zinspolitik \| Interest rate policy \| Wechselkurspolitik \| Exchange rate policy \| Theorie \| Theory \| Internationale Staatsschulden \| International sovereign debt \| Länderrisiko \| Country risk \| Staatsbankrott \| Sovereign default \| Kleine offene Volkswirtschaft \| Small open economy \| Flexibler Wechselkurs \| Flexible exchange rate

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Extent:	Online-Ressource (8 S.)
Series:	Discussion paper / Tinbergen Institute. - Rotterdam [u.a.] : [Verlag nicht ermittelbar], ISSN 0929-0834, ZDB-ID 2435783-2. - Vol. 2011,027
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: PDF Reader
Other identifiers:	hdl:10419/86879 [Handle]
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization ; F31 - Foreign Exchange ; F41 - Open Economy Macroeconomics
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011383088