A Gravity Model of Sovereign Lending: Trade, Default and Credit

Andrew Rose and Mark Spiegel

No 2002-09, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: One reason why countries service their external debts is the fear that default might lead to shrinkage of international trade. If so, then creditors should systematically lend more to countries with which they share closer trade links. We develop a simple theoretical model to capture this intuition, then test and corroborate this idea.

Keywords: International trade; Credit; Risk (search for similar items in EconPapers)
JEL-codes: F15 F33 (search for similar items in EconPapers)
Pages: 20
Date: 2002-09-01
Note: PDF date: This draft: August 6, 2002.
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Citations: View citations in EconPapers (46)

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Related works:
Journal Article: A Gravity Model of Sovereign Lending: Trade, Default, and Credit (2004)
Working Paper: A Gravity Model of Sovereign Lending: Trade, Default and Credit (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2002-09

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DOI: 10.24148/wp2002-09

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