Inflation, default and sovereign debt: The role of denomination and ownership

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Standard

Inflation, default and sovereign debt : The role of denomination and ownership. / Sunder-Plassmann, Laura.

I: Journal of International Economics, Bind 127, 103393, 11.2020.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Sunder-Plassmann, L 2020, 'Inflation, default and sovereign debt: The role of denomination and ownership', Journal of International Economics, bind 127, 103393. https://doi.org/10.1016/j.jinteco.2020.103393

APA

Sunder-Plassmann, L. (2020). Inflation, default and sovereign debt: The role of denomination and ownership. Journal of International Economics, 127, [103393]. https://doi.org/10.1016/j.jinteco.2020.103393

Vancouver

Sunder-Plassmann L. Inflation, default and sovereign debt: The role of denomination and ownership. Journal of International Economics. 2020 nov.;127. 103393. https://doi.org/10.1016/j.jinteco.2020.103393

Author

Sunder-Plassmann, Laura. / Inflation, default and sovereign debt : The role of denomination and ownership. I: Journal of International Economics. 2020 ; Bind 127.

Bibtex

@article{cc35f843a3a045adb8a8435f0e646fe6,
title = "Inflation, default and sovereign debt: The role of denomination and ownership",
abstract = "Emerging market governments hold mixed debt portfolios: They borrow at home and abroad in both nominal and real terms. This paper incorporates such a mixed debt structure into a theory of sovereign debt, default and inflation. The government optimally uses both default and inflation to balance its budget. The portfolio structure affects the relative benefits of inflation, default and incentives to accumulate debt. A calibrated version of the model can account for key features of the Mexican economy. We use the model to study if portfolio shifts away from purely real and external debt contributed to emerging market disinflation in the mid 1990s. We find that the answer depends on the distinction between ownership and denomination: Increasingly nominal debt is inflationary if held abroad, but lowers inflation if held at home.",
keywords = "Government debt composition, Inflation, Sovereign debt crises",
author = "Laura Sunder-Plassmann",
year = "2020",
month = nov,
doi = "10.1016/j.jinteco.2020.103393",
language = "English",
volume = "127",
journal = "Journal of International Economics",
issn = "0022-1996",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Inflation, default and sovereign debt

T2 - The role of denomination and ownership

AU - Sunder-Plassmann, Laura

PY - 2020/11

Y1 - 2020/11

N2 - Emerging market governments hold mixed debt portfolios: They borrow at home and abroad in both nominal and real terms. This paper incorporates such a mixed debt structure into a theory of sovereign debt, default and inflation. The government optimally uses both default and inflation to balance its budget. The portfolio structure affects the relative benefits of inflation, default and incentives to accumulate debt. A calibrated version of the model can account for key features of the Mexican economy. We use the model to study if portfolio shifts away from purely real and external debt contributed to emerging market disinflation in the mid 1990s. We find that the answer depends on the distinction between ownership and denomination: Increasingly nominal debt is inflationary if held abroad, but lowers inflation if held at home.

AB - Emerging market governments hold mixed debt portfolios: They borrow at home and abroad in both nominal and real terms. This paper incorporates such a mixed debt structure into a theory of sovereign debt, default and inflation. The government optimally uses both default and inflation to balance its budget. The portfolio structure affects the relative benefits of inflation, default and incentives to accumulate debt. A calibrated version of the model can account for key features of the Mexican economy. We use the model to study if portfolio shifts away from purely real and external debt contributed to emerging market disinflation in the mid 1990s. We find that the answer depends on the distinction between ownership and denomination: Increasingly nominal debt is inflationary if held abroad, but lowers inflation if held at home.

KW - Government debt composition

KW - Inflation

KW - Sovereign debt crises

U2 - 10.1016/j.jinteco.2020.103393

DO - 10.1016/j.jinteco.2020.103393

M3 - Journal article

AN - SCOPUS:85092497067

VL - 127

JO - Journal of International Economics

JF - Journal of International Economics

SN - 0022-1996

M1 - 103393

ER -

ID: 255048579