The lack of a supra-national legal authority that can enforce private contracts across borders makes debt repayment in an international setting contingent on borrowers' willingness to pay rather than ability to pay. This market failure (i.e., inadequate enforcement) causes investment to fall...

The lack of a supra-national legal authority that can enforce private contracts across borders makes debt repayment in an international setting contingent on borrowers' willingness to pay rather than ability to pay. This market failure (i.e., inadequate enforcement) causes investment to fall...

We consider a model that provides insight into the well-known Folk Theorem in economics that when the discount factor, (Greek character) 'beta', is sufficiently close to one, expropriation will never occur. While this Folk Theorem is true in our model, our perspective is different. 'Beta' is...