The accumulation of large amount of sovereign reserves has fuelled an intense debate on the associated costs. In a world with liquidity crises and strategic default, we model a contracting game between international lenders and a country, which delivers the country's optimal portfolio choice and...

The accumulation of large amount of sovereign reserves has fuelled an intense debate on the associated costs. In a world with liquidity crises and strategic default, we model a contracting game between international lenders and a country, which delivers the country's optimal portfolio choice and...

The paper aims to investigate the economic relationship between inflation and domestic debt. In countries that experience high inflation, the inflationary process fed on increasing costs of domestic debt. As a result, the increasing debt to GDP ratios led these countries to borrow at higher...