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

Andrew Rose and Mark Spiegel

IMF Staff Papers, 2004, vol. 51, issue s1, 50-63

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.

JEL-codes: F15 F33 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (118)

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Working Paper: A gravity model of sovereign lending: trade, default and credit (2002)
Working Paper: A Gravity Model of Sovereign Lending: Trade, Default and Credit (2002)
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