Sovereign default risk and commitment for fiscal adjustment

• 成果类型: Article
• 署名作者: Goncalves, Carlos Eduardo; Guimaraes, Bernardo
• 署名单位: Universidade de Sao Paulo; Getulio Vargas Foundation
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2014.11.008
• 发表日期: 2015
• 页码: 68-82
• 关键词: Fiscal adjustment; Sovereign debt; sovereign default; time inconsistency; IMF

摘要

This paper studies fiscal policy in a model of sovereign debt and default A time inconsistency problem arises: since the price of past debt cannot be affected by current fiscal policy and governments cannot credibly commit to a certain path of tax rates, debtor countries choose suboptimally low fiscal adjustments. An international organization, capable of designing a contract that coaxes debtors into a tougher fiscal stance via the provision of cheap senior lending in times of crisis, can work as a commitment device and improve social welfare. (C) 2014 Published by Elsevier B.V.