International Spillovers and Bailouts

• 成果类型: Article
• 署名作者: Azzimonti, Marina; Quadrini, Vincenzo
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Richmond; University of Southern California; Center for Economic & Policy Research (CEPR)
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdad025
• 发表日期: 2024
• 页码: 77-128
• 关键词: Sovereign default risk; equilibrium-model; debt; GLOBALIZATION; fragility

摘要

We study how cross-country macroeconomic spillovers caused by sovereign default affect equilibrium bailouts. Because of portfolio diversification, the default of one country causes a macroeconomic contraction in other countries, which motivates a bailout. But why do creditor countries choose to bailout debtor countries instead of their own private sector? We show that this is because an external bailout could be cheaper than a domestic bailout. We also show that although anticipated bailouts lead to higher borrowing, they can be Pareto improving not only ex post (after a country has defaulted) but also ex ante (before the country chooses its debt).