A Gravity Model of Sovereign Lending: Trade, Default, and Credit

One reason why countries service their external debts is the fear that default might lead to shrinkage of international trade. If so, then creditors should systematically lend more to countries with which they share closer trade links. We develop a simple theoretical model to capture this intuition, then test and corroborate this idea.

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Year of publication:	2004
Authors:	Rose, Andrew K. ; Spiegel, Mark M.
Published in:	IMF Staff Papers. - Palgrave Macmillan, ISSN 1020-7635. - Vol. 51.2004, s1, p. 50-63
Publisher:	Palgrave Macmillan

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Extent:	application/pdf
Type of publication:	Article
Classification:	F15 - Economic Integration ; F33 - International Monetary Arrangements and Institutions
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009018600