全球智库信息集成服务系统(G2TT): Crisis and Commitment: Inflation Credibility and the Vulnerability to Sovereign Debt Crises

G2TT

来源类型	Working Paper
规范类型	报告
DOI	10.3386/w19516
来源ID	Working Paper 19516
	Crisis and Commitment: Inflation Credibility and the Vulnerability to Sovereign Debt Crises
	Mark Aguiar; Manuel Amador; Emmanuel Farhi; Gita Gopinath
发表日期	2013-10-10
出版年	2013
语种	英语
摘要	We propose a continuous time model of nominal debt and investigate the role of inflation credibility in the potential for self-fulfilling debt crises. Inflation is costly, but reduces the real value of outstanding debt without the full punishment of default. With high inflation credibility, which can be interpreted as joining a monetary union or issuing foreign currency debt, debt is effectively real. By contrast, with low inflation credibility, sovereign debt is nominal and in a debt crisis a government may opt to inflate away a fraction of the debt burden rather than explicitly default. This flexibility potentially reduces the country's exposure to self-fulfilling crises. On the other hand, the government lacks credibility not to inflate in the absence of crisis. This latter channel raises the cost of debt in tranquil periods and makes default more attractive in the event of a crisis, increasing the country's vulnerability. We characterize the interaction of these two forces. We show that there is an intermediate inflation credibility that minimizes the country's exposure to rollover risk. Low inflation credibility brings the worst of both worlds--high inflation in tranquil periods and increased vulnerability to a crisis.
主题	Macroeconomics ; Business Cycles ; Money and Interest Rates ; Fiscal Policy ; International Economics ; International Finance ; Financial Economics ; Financial Markets
URL	https://www.nber.org/papers/w19516
来源智库	National Bureau of Economic Research (United States)
引用统计
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/577189
推荐引用方式 GB/T 7714	Mark Aguiar,Manuel Amador,Emmanuel Farhi,et al. Crisis and Commitment: Inflation Credibility and the Vulnerability to Sovereign Debt Crises. 2013.