A Brazilian Debt-Crisis Model

Assaf Razin and Efraim Sadka

No 3541, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a stylised model of multiple equilibria, with country risk spreads at the focus of the analysis. Fears that the country default on its debt triggers a reversal in the direction of inflows of international financial capital raise interest-rate spreads and thus the cost of servicing the public debt. The analytical framework is standard: creditors observe the output of borrowing only at a cost.

Keywords: Costly-state verification; Multiple self-fulfilling-expectations equilibria; Debt crisis (search for similar items in EconPapers)
JEL-codes: F3 (search for similar items in EconPapers)
Date: 2002-09
New Economics Papers: this item is included in nep-lam
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP3541 (application/pdf)

Related works:
Working Paper: A Brazilian Debt-Crisis Model (2002)
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:cpr:ceprdp:3541

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP3541

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().