Sovereign default and capital accumulation
成果类型：
Article
署名作者：
Park, JungJae
署名单位：
National University of Singapore
刊物名称：
JOURNAL OF INTERNATIONAL ECONOMICS
ISSN/ISSBN：
0022-1996
DOI：
10.1016/j.jinteco.2017.02.004
发表日期：
2017
页码：
119-133
关键词：
摘要：
This paper introduces endogenous capital accumulation into an otherwise standard quantitative sovereign default model a la Eaton and Gersovitz (1981). We find that conditional on a level of debt, default incentives are U-shaped in the capital stock: the economy with too small or too large amounts of capital is likely to default. Even without using an ad-hoc output cost of default, the calibrated model generally well matches business cycle facts of emerging economies and generates defaults in good and bad times, with a frequency of 25.5% and 74.5%, respectively, consistent with Tomz and Wright (2007)'s empirical findings. Simulation results show that the economy defaults in good times when it has overinvested in capital during booms before default. (C) 2017 Elsevier B.V. All rights reserved.