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We characterize the values of government debt and the debt's maturity structure under which financial crises brought on … can be gradual if debt is high or the probability of a crisisis low. We also show that, while lengthening the maturity of …
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We revisit self-fulfilling rollover crises by exploring the potential uncertainty introduced by a gap in time (however small) between an auction of new debt and the payment of maturing liabilities. It is well known (Cole and Kehoe, 2000) that the lack of commitment at the time of auction to...
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maturity in the event of crises, and show that both necessarily improve ex ante welfare if they do not decrease expected …
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maturity in the event of crises, and show that both necessarily improve ex ante welfare if they do not decrease expected …
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