IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The Role of Multilateral Institutions in the Market for Sovereign Debt

  • Bhattacharya, Sudipto
  • Detragiache, Enrica

Creditor country governments have an interest in avoiding defaults by sovereign debtors because default sanctions may be costly to their citizens. As a result, a standard bargaining model predicts that debtors do not repay in equilibrium, even if the threat of sanctions is credible on the part of the banks. By contracting with a third party, such as a multilateral institution with some degree of independence, creditor country governments can precommit not to intervene. In equilibrium, when debt renegotiation occurs, the sovereign receives a subsidy from the multilateral agency. The model is used to interpret recent debt reduction operations. Copyright 1994 by The editors of the Scandinavian Journal of Economics.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 96 (1994)
Issue (Month): 4 ()
Pages: 515-29

as
in new window

Handle: RePEc:bla:scandj:v:96:y:1994:i:4:p:515-29
Contact details of provider: Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

Order Information: Web: http://www.blackwellpublishing.com/subs.asp?ref=0347-0520

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bla:scandj:v:96:y:1994:i:4:p:515-29. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.