Why do governments borrow internationally, so much as to risk default? Why do they remain out of financial markets for a while after default? This paper develops a quantitative model of sovereign default with endogenous default costs to propose a novel and unified answer to these questions. In...

Preface -- Acknowledgments -- Introduction -- The early modern Japanese economy -- The failure of the temp? : reforms and the opening of Yokohama -- The first merchant of Yokohama -- Bakumatsu Japan's trade and Yokohama's place in that trade -- Yokohama and its hinterland -- The producers of...

The U.S. government faces a looming fiscal crisis. A default on Treasury securities appears inevitable. The short-run consequences for the economy will be painful. But the long-run consequences, both economic and political, could be beneficial. The most important long-run political benefit would...