Sovereign Bailouts

We extend the standard Eaton and Gersovitz (1981) sovereign default model to study bailout policies. In our setup a country that concentrates a significant fraction of bond holders decide on a period by period basis whether to bailout a debtor government. The combination of bailout policies and decentralized lending decisions give rise to a pecuniary externality.

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Year of publication:	2014
Authors:	Martinez, Leonardo ; Hatchondo, Juan ; Kuruscu, Burhanettin ; Guler, Bulent
Institutions:	Society for Economic Dynamics - SED

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Extent:	application/pdf
Series:	2014 Meeting Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series 2014 SED Meeting Papers Number 1278
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011188031