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Borrowing in excess of natural ability to repay

hal.structure.identifier
dc.contributor.authorMartins-da-Rocha, Victor-Filipe
HAL ID: 10403
ORCID: 0000-0002-6244-2678		*
hal.structure.identifier
dc.contributor.authorVailakis, Yiannis*
dc.date.accessioned2017-03-09T16:17:13Z
dc.date.available2017-03-09T16:17:13Z
dc.date.issued2017
dc.identifier.issn1094-2025
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/16322
dc.language.isoenen
dc.subjectLack of commitmenten
dc.subjectSelf-enforcing debten
dc.subjectNatural debt limiten
dc.subject.ddc332en
dc.subject.classificationjelH63en
dc.subject.classificationjelG13en
dc.subject.classificationjelF34en
dc.subject.classificationjelD51en
dc.subject.classificationjelD50en
dc.titleBorrowing in excess of natural ability to repayen
dc.typeArticle accepté pour publication ou publié
dc.description.abstractenThe paper aims at improving our understanding of self-enforcing debt in competitive dynamic economies with lack of commitment when default induces a permanent loss of access to international credit markets. We show, by means of examples, that a sovereign's creditworthiness is not necessarily limited by the ability to repay out of its future resources. Self-enforcing debt grows at the same rate as interest rates. If a sovereign's endowment growth rates are lower than interest rates, then debt limits eventually exceed the natural debt limits. This implies that there is asymptotic borrowing in present value terms. We show that this can be compatible with lending incentives when credible borrowers facilitate inter-temporal exchange, acting as pass-through intermediaries that alleviate the lenders' credit restrictionsen
dc.relation.isversionofjnlnameReview of Economic Dynamics
dc.relation.isversionofjnlvol23en
dc.relation.isversionofjnldate2017
dc.relation.isversionofjnlpages42-59en
dc.relation.isversionofdoi10.1016/j.red.2016.09.006en
dc.identifier.urlsitehttps://hal.archives-ouvertes.fr/hal-01249202en
dc.relation.isversionofjnlpublisherElsevieren
dc.subject.ddclabelEconomie financièreen
dc.relation.forthcomingnonen
dc.relation.forthcomingprintnonen
dc.description.ssrncandidatenonen
dc.description.halcandidatenonen
dc.description.readershiprechercheen
dc.description.audienceInternationalen
dc.relation.Isversionofjnlpeerreviewedouien
dc.relation.Isversionofjnlpeerreviewedouien
dc.date.updated2017-03-08T15:37:16Z
hal.author.functionaut
hal.author.functionaut


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