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Reputation and Partial Default / Manuel Amador, Christopher Phelan.
- Format:
- Book
- Author/Creator:
- Amador, Manuel.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28997.
- NBER working paper series no. w28997
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- This paper presents a continuous-time reputation model of sovereign debt allowing for both varying levels of partial default and full default. In it, a government can be a non-strategic commitment type, or a strategic opportunistic type, and a government's reputation is its equilibrium Bayesian posterior of being the commitment type. Our equilibrium has that for bond levels reachable by both types without defaulting, bigger partial defaults (or bigger haircuts for bond holders) imply higher interest rates for subsequent bond issuances, as in the data.
- Notes:
- Print version record
- July 2021.
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