Cole, HL;
Kehoe, PJ;
(1998)
Models of sovereign debt: Partial versus general reputations.
International Economic Review
, 39
(1)
pp. 55-70.
10.2307/2527230.
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Abstract
Some economists argue that as long as governments can earn the market rate of return by saving abroad, standard reputation models cannot support debt. We argue that these standard reputation models are partial in the sense that actions of agents in one arena affect reputation in that arena only. We develop a general model of reputation in which if a government is viewed as untrustworthy in one relationship, this government will be viewed as untrustworthy in other relationships. We show that our general model of reputation can support large amounts of debt.
| Type: | Article |
|---|---|
| Title: | Models of sovereign debt: Partial versus general reputations |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.2307/2527230 |
| Publisher version: | https://doi.org/10.2307/2527230 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10058353 |
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