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Unresolved sovereign debt problems are hurting debtor nations, their citizens and their creditors, and also can pose serious systemic threats to the international financial system. The existing contractual restructuring approach is insufficient to make sovereign debt sustainable. Although a more...
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In an influential paper, Bulow and Rogoff (1989) prove that in a competitive financial market, the threat of credit exclusion alone cannot sustain repayment of sovereign debt, as the defaulting government can still enter cash-in-advance insurance contracts. However, their result relies on an...
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We study the sustainability of public debt in a closed production economy where a benevolent government chooses fiscal …
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economy in those countries. In the case of Mongolia, not only non-viable enterprises closed down, but many possibly viable … into the development of TFP in Mongolia. Simulations are performed to see what happens with TFP if not the le! ast … Productivity of Mongolia was tested not only for errors in all estimated values but also for measurement errors in the data. It was …
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