000			02732cam a22003737 4500
001			w22509
003			NBER
005			20211020105209.0
006			m o d
007			cr cnu||||||||
008			210910s2016 mau fo 000 0 eng d
100	1		_aD'Erasmo, Pablo.
245	1	0	_aOptimal Domestic (and External) Sovereign Default / _cPablo D'Erasmo, Enrique G. Mendoza.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2016.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w22509
500			_aAugust 2016.
520	3		_aInfrequent but turbulent episodes of outright sovereign default on domestic creditors are considered a "forgotten history" in Macroeconomics. We propose a heterogeneous-agents model in which optimal debt and default on domestic and foreign creditors are driven by distributional incentives and endogenous default costs due to the value of debt for self-insurance, liquidity and risk-sharing. The government's aim to redistribute resources across agents and through time in response to uninsurable shocks produces a rich dynamic feedback mechanism linking debt issuance, the distribution of government bond holdings, the default decision, and risk premia. Calibrated to Spanish data, the model is consistent with key cyclical co-movements and features of debt-crisis dynamics. Debt exhibits protracted fluctuations. Defaults have a low frequency of 0.93 percent, are preceded by surging debt and spreads, and occur with relatively low external debt. Default risk limits the sustainable debt and yet spreads are zero most of the time.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aE6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook _2Journal of Economic Literature class.
690		7	_aE62 - Fiscal Policy _2Journal of Economic Literature class.
690		7	_aF34 - International Lending and Debt Problems _2Journal of Economic Literature class.
690		7	_aG01 - Financial Crises _2Journal of Economic Literature class.
690		7	_aH63 - Debt • Debt Management • Sovereign Debt _2Journal of Economic Literature class.
700	1		_aMendoza, Enrique G.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w22509.
856	4	0	_uhttps://www.nber.org/papers/w22509
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w22509
942			_2ddc _cW-PAPER
999			_c325613 _d284175