A general equilibrium model of sovereign borrowing and non-sovereign financial intermediation

Ernst Mohr

No 40, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy"

Abstract: In a general equilibrium model, international lending through a non-sovereign financial intermediary (a banking system) to a sovereign borrower is analyzed. Under very pessimistic assumptions, including a principal-agency type of incentive to load future intermediation with certain bancrupcy for the sake of present sovereign debt servicing, sustainable international lending that avoids both, repudiation and bancrupcy is determined. There is a plethora of roll-over and net-transfer steady-states. Compared to financial autarky, steady-state lending is capital depriving. Nevertheless, lending may be welfare improving in the creditor country and the world as a whole.

Date: 1987
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/101743/1/74114235X.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:zbw:kondp2:40

Access Statistics for this paper

More papers in Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy" Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().