Beetsma, Roel; Mavromatis, Konstantinos - C.E.P.R. Discussion Papers - 2012
We analyse different forms of international debt mutualisation in a simple framework with a political distortion and … (partial) default under adverse economic circumstances. One form is a debt repayment guarantee, which can be "unlimited" or …, under which blue debt is guaranteed by the other countries in a union, while red debt is not guaranteed. Only a suitably …