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IMF working paper: The Cost of Aggressive Sovereign Debt Policies: How Much is the Private Sector Affected?

This paper proposes a new empirical measure of cooperative versus conflictual crisis resolution following sovereign default and debt distress. The index of government coerciveness is presented as a proxy for excusable versus inexcusable default behaviour and used to evaluate the costs of default for the domestic private sector, in particular its access to international debt…

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IMF working paper: Does Procyclical Fiscal Policy Reinforce Incentives to Dollarize Sovereign Debt?

This paper explores the link between the cyclical patterns of macroeconomic and policy variables and the currency composition of domestic sovereign debt in emerging market countries. The empirical analysis is anchored in an equilibrium model, in which the dollarization of sovereign debt arises as a result of the optimal portfolio choices by riskaverse investors, and…

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