EconPapers    
Economics at your fingertips  
 

Inflation, Default, and the Currency Composition of Sovereign Debt in Emerging Economies: Working Paper 2017-01

Daniel Fried

No 52385, Working Papers from Congressional Budget Office

Abstract: In emerging market economies, governments issue debt denominated both in their own currency and in foreign currencies. I develop a theory of the optimal composition of sovereign debt between local and foreign currencies. In a model with a micro-founded monetary framework a government controls monetary policy and has the ability to borrow from abroad using both local and foreign currency bonds. In this model, local currency bonds differ from foreign currency bonds in two important ways. Unlike foreign currency bonds, local currency bonds function as a contingent claim,

JEL-codes: F30 F33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mon
Date: 2017-02-02
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://www.cbo.gov/sites/default/files/115th-cong ... rgingeconomieswp.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbo:wpaper:52385

Access Statistics for this paper

More papers in Working Papers from Congressional Budget Office Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2018-11-03
Handle: RePEc:cbo:wpaper:52385