A quantitative model of sovereign debt, bailouts and conditionality

• 成果类型: Article
• 署名作者: Fink, Fabian; Scholl, Almuth
• 署名单位: University of Konstanz
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2015.09.007
• 发表日期: 2016
• 页码: 176-190
• 关键词: sovereign debt; Sovereign default risk; Bailouts; CONDITIONALITY; fiscal policy

摘要

In times of sovereign debt crises, International Financial Institutions provide temporary financial support contingent on the implementation of specific macroeconomic policies. This paper develops a model of sovereign debt and default with endogenous participation rates in bailout programs. Conditionality enters as a constraint on fiscal policy. In the model, the insurance character of bailouts generates incentives for debt accumulation. Quantitative results suggest that bailouts prevent sovereign defaults in the short-run but may come at a cost of a greater default probability in the long-run. Increasing the intensity of conditionality lowers the bailout participation rate and generates a hump-shaped pattern of sovereign default risk. (C) 2015 Elsevier B.V. All rights reserved.