Resource title

A theory of sovereign debt roll-over crisis

Resource image

image for OpenScout resource :: A theory of sovereign debt roll-over crisis

Resource description

In this paper, we attempt to provide theoretical investigation to debt roll-over crisis in government bond market. By using the global game techniques, we analyse coordination problem in debt auction. The approach in this paper allows us to have insight on the relation between occurence of soverign debt roll-over crisis and the fundamentals of economy which is not clearly explained in preceding works. This paper also makes it clear how the amount of debt for refinancing affects occurrence of soverign debt roll-over crisis. Inplications to policymakers are that they should pay attention to possible serious consequence of debt-bunching which usually grows gradually over time. In public debt management, the government decisions today affect the situation facing the government in the future via change in redemption schedules. Although the cost of debt roll-over crisis is not easy to gauge beforehand, its possibility should be noted by policymakers.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://eprints.lse.ac.uk/24700/1/dp488.pdf

Resource license