Sargent‐Wallace Meets Krugman‐Flood‐Garber, or
Why Sovereign Debt Swaps do not Avert Macroeconomic Crises
Bibliographic Data
| ID | 9707740 |
|---|---|
| Authors | Joshua Aizenman (0000-0002-7213-6105, University of California, Santa Cruz and NBER), Kenneth M Kletzer (University of California, Santa Cruz), Kenneth Kletzer (Ifo Institute for Economic Research), Brian Pinto (World Bank) |
| Year | 2005 |
| Volume | 115 |
| Issue | 503 |
| Pages | 343-367 |
| Publication date | 2005-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2005.00992.x |
| OpenAlex | W2086507641 |
| Language | EN |
| Citations received | 1 |
| References cited | 2 |
This paper argues that the frequent failure of the debt swaps follows from fundamental forces driven by the market's assessment of the scarcity of fiscal revenue relative to the demand for fiscal outlays. As a country approaches the range of partial default, swaps may not provide the expected breathing room and could even bring the crisis forward. Our methodology combines three independent themes: exchange rate crises as the manifestation of excessive monetary injections, the fiscal theory of inflation and sovereign debt. The integrated framework derives devaluation and external debt repudiation as part of a public-finance optimising problem. Copyright 2005 Royal Economic Society
Arbitrage · Debt · Economics · Exchange rate · Financial economics · Macroeconomics · Monetary economics · Swap (finance · Economic Theory and Policy · Finance · Fiscal Policies and Political Economy · Global Financial Crisis and Policies
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,5 |
| Citation span | 2024 - 2024 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |