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Cooper, Russell - 2012

This paper studies debt fragility and the sharing of the resulting strategic uncertainty through ex post bailouts. Default arises in equilibrium because of both fundamental shocks and beliefs. The probability of default depends on borrowing rates and, in equilibrium, on the beliefs of lenders...

Persistent link: https://www.econbiz.de/10012460282

The Economics of Sovereign Debt, Bailouts and the Eurozone Crisis

Gourinchas, Pierre-Olivier - 2020

Despite a formal 'no-bailout clause', we estimate significant net present value transfers from the European Union to … differences across countries. We characterize bailout size and likelihood as a function of the economic fundamentals (economic … 'Northern view' (transfers weaken fiscal discipline). While a stronger no-bailout commitment reduces risk-shifting, it may not …

Persistent link: https://www.econbiz.de/10012481598

From Financial Crash to Debt Crisis

Reinhart, Carmen M. - 2010

Newly developed long historical time series on public debt, along with modern data on external debts, allow a deeper analysis of the cycles underlying serial debt and banking crises. The evidence confirms a strong link between banking crises and sovereign default across the economic history of...

Persistent link: https://www.econbiz.de/10012462855

Fiscal and Financial Crises

Bordo, Michael D. - 2016

Interconnections between banking crises and fiscal crises have a long history. We document the long-run evolution from classic banking panics towards modern banking crises where financial guarantees are associated with crisis resolution. Recent crises feature a feedback loop between bank...

Persistent link: https://www.econbiz.de/10012456615

Balance SHeet Effects, Bailout Guarantees and Financial Crises

Schneider, Martin - 2000

international credit markets: bailout guarantees and the imperfect enforceability of contracts. The interaction of these distortions …

Persistent link: https://www.econbiz.de/10012470672

Quantitative Models of Sovereign Debt Crises

Aguiar, Mark - 2016

This chapter is on quantitative models of sovereign debt crises in emerging economies. We interpret debt crises broadly to cover all of the major problems a country can experience while trying to issue new debt, including default, sharp increases in the spread and failed auctions. We examine the...

Persistent link: https://www.econbiz.de/10012456549

Why Has Japan's Massive Government Debt Not Wreaked Havoc (Yet)?

Horioka, Charles Y. - 2013

In this paper, we present data on trends over time in government debt financing in Japan since 2010 with emphasis on the importance of foreign holders and speculate about the determinants of those trends. We find that Japanese government securities were held primarily by domestic holders until...

Persistent link: https://www.econbiz.de/10012459066

Internal Debt Crises and Sovereign Defaults

Arellano, Cristina - 2008

In this paper, we use data from developing countries to argue that sovereign defaults are often caused by fiscal pressures generated by large-scale domestic defaults. We argue that these systemic domestic defaults are caused by shocks best interpreted as being non-fundamental. We construct a...

Persistent link: https://www.econbiz.de/10012464852

A Brazilian-Type Debt Crisis : Simple Analytics

Razin, Assaf - 2003

We develop a model that captures important features of debt crises of the Brazilian type. Its applicability to Brazil lies in the fact that (1) macro fundamentals were sound in the wake of the crisis (e .g., a non-negligible primary surplus, a relatively low debt/GDP ratio, low inflation, etc.);...

Persistent link: https://www.econbiz.de/10012469092

Competition and Intervention in Sovereign Debt Markets

Paasche, Bernhard - 2001

We investigate markets for defaultable sovereign debt in which even though there are many identical lenders and symmetric information (including no hidden actions), perfect competition does not obtain. When a private lender allows a sovereign country to increase its level of indebtedness, that...

Persistent link: https://www.econbiz.de/10012470036