European Parliament Library

Can Debt Crises Be Self-Fulfilling?, Marcos Chamon

Abstract
Several papers argue that debt crises can be the result of self-fulfilling expectations that no one will lend to a country. I show this type of coordination failure can be eliminated by a combination of state-contingent securities and a mechanism that allows investors to promise to lend only if enough other investors do so as well. This suggests that runs on the debt of a single borrower (such as the government) can be eliminated, and that self-fulfilling features are more plausible when articulated in a context in which externalities among many decentralized borrowers allow for economy-wide debt runs to occur
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. THE BASIC ENVIRONMENT""; ""III. SOLVING THE COORDINATION PROBLEMS""; ""IV. DISCUSSION""; ""V. CONCLUSION""; ""REFERENCES""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (22 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9786613779519

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