We characterize the values of government debt and the debt's maturity structure under which financial crises brought on by a loss of confidence in the government can arise within a dynamic, stochastic general equilibrium model. We also characterize the optimal policy response of the government...

In a monetary model, it is shown that if there is a unique Pareto inefficient barter equilibrium, then a monetary equilibrium exists when traders are sufficiently patient. Copyright 1989 by The Review of Economic Studies Limited.

This paper studies reputation effects in games with a single long-run player whose choice of stage-game strategy is imperfectly observed by his opponents. The authors obtain lower and upper bounds on the long-run player's payoff in any Nash equilibrium of the game. If the long-run player's...