Heer, Burkhard; Schubert, Stefan Franz - In: Journal of International Money and Finance 31 (2012) 6, pp. 1392-1413
a highly indebted open economy. In contrast to the standard open economy framework, search unemployment and wage … dynamics and a considerable reduction in foreign debt, allowing higher consumption in the long run and creating an … intertemporal welfare gain, even though unemployment increases strongly in the short-run. A 50% haircut of foreign debt …