effectiveness indicators, external debt, external reserves, and default history. …

debt contract is limited? Contrary to conventional wisdom, we argue that temporary market exclusion after default is costly … government's market power mitigates the problem of limited commitment, by making default a more costly option. Consequently, it …

. I analyze the value of a default-risky sovereign bond in a setting in which foreign trade is reduced in case the country …

default mostly selectively. We propose a theory to rationalize these observations. A government chooses the optimal … less costly than raising taxes, but it is subject to default risk due to the government's limited commitment. A … quantitative, calibrated model with two shocks and two debts replicates well debt-to-GDP ratios, default frequencies, cyclical …

financial assistance has counteracting effects on the default incentives of governments. On the one hand, financial assistance … accumulate higher debt levels. To assess the overall effect of financial assistance on the probability of default we construct a … quantitative model of endogenous credit structure and sovereign default that allows for self-fulfilling expectations of default …

puzzles about sovereign default and the working out of defaults. We conclude by suggesting possible avenues for new research …