Choi, Jason; Dang, Duong Q.; Kirpalani, Rishabh; Perez, … - National Bureau of Economic Research - 2024
We study the extent to which the perceived cost of losing the exorbitant privilege the US holds in global safe asset markets sustains the safety of its public debt. Our findings indicate that the loss of this special status in the event of a default significantly augments the debt capacity for...