Sovereign Default Risk Fiscal Adjustment And Debt Renegotiation
Download and Read Sovereign Default Risk Fiscal Adjustment And Debt Renegotiation full books in PDF, ePUB, and Kindle. Read online free Sovereign Default Risk Fiscal Adjustment And Debt Renegotiation ebook anywhere anytime directly on your device. We cannot guarantee that every ebooks is available!
Sovereign Default Risk, Fiscal Adjustment, and Debt Renegotiation
Author | : Hyungseok Joo |
Publisher | : |
Total Pages | : 42 |
Release | : 2017 |
Genre | : |
ISBN | : |
Download Sovereign Default Risk, Fiscal Adjustment, and Debt Renegotiation Book in PDF, Epub and Kindle
This paper studies the effects of government capital accumulation on sovereign debt default risk and debt restructuring renegotiation outcomes when government has limited ability to extract revenues from households. We develop a quantitative dynamic stochastic general equilibrium model of sovereign default, debt renegotiation, and fiscal policies, where government chooses between the fiscal instruments of government consumption and government investment. Government capital provides an additional means of adjustment in the face of a bad productivity shock. It also affects government's incentive to re-access the international credit market when a country chooses to default. We implement fiscal policies and rules that restrict foreign debt, especially focusing on how fiscal rules affect government spending dynamics. The model delivers three key predictions. (1) A higher level of government capital implies less risky sovereign debt and higher recovery rates when the government chooses to default. (2) A high debt to output ratio is possible with a sufficient level of government capital. (3) Fiscal adjustment that reduces public investment may be self-defeating.
Sovereign Default Risk, Fiscal Adjustment, and Debt Renegotiation Related Books
Pages: 42
Pages: 28
Pages: 27
Pages: 288
Pages: 128