Bloise, Gaetano; Polemarchakis, Heraklis M.; Vailakis, … - In: Theoretical economics : TE ; an open access journal in … 12 (2017) 3, pp. 1121-1154
We show that sovereign debt is unsustainable if debt contracts are not supported by direct sanctions and default carries only a ban from ever borrowing in financial markets even in the presence of uninsurable risks and time-varying interest rate. This extension of Bulow and Rogoff, 1989 requires...
