| Description |
1 online resource (46 pages) : color illustrations |
| Series |
IMF working paper ; WP/16/136 |
|
IMF working paper ; WP/16/136.
|
| Summary |
Motivated by the recent European debt crisis, this paper investigates the scope for a bailout guarantee in a sovereign debt crisis. Defaults may arise from negative income shocks, government impatience or a "sunspot"--Coordinated buyers strike. We introduce a bailout agency, and characterize the minimal actuarially fair intervention that guarantees the no-buyers-strike fundamental equilibrium, relying on the market for residual financing. The intervention makes it cheaper for governments to borrow, inducing them borrow more, leaving default probabilities possibly rather unchanged. The maximal backstop will be pulled precisely when fundamentals worsen |
| Notes |
"July 2016." |
|
At head of title: International Monetary Fund, Western Hemisphere Department |
| Bibliography |
Includes bibliographical references (pages 32-34) |
| Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed September 12, 2016) |
| Subject |
Debts, Public -- Europe
|
|
Bailouts (Government policy) -- Europe
|
|
Default (Finance) -- Europe
|
|
Bailouts (Government policy)
|
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Debts, Public
|
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Default (Finance)
|
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Europe
|
| Form |
Electronic book
|
| Author |
Uhlig, Harald, 1961- author.
|
|
International Monetary Fund, publisher.
|
|
International Monetary Fund. Western Hemisphere Department, issuing body.
|
| ISBN |
9781475581027 |
|
1475581025 |
|
