Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund. Research Department, issuing body.
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| ISBN: | 1455279625
9781455279623
1281994901
9781281994905
1462318770
9781462318773
1455237353
9781455237357
9786613794857
6613794856
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| Notes: | Includes bibliographical references (pages 22-24).
Restrictions unspecified
Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
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| Summary: | Annotation This paper studies under what circumstances creditworthy sovereign borrowers may be denied liquidity by rational creditors. It is shown that, when the creditor side of the market consists of many small investors there may be multiple rational expectations equilibria. In one equilibrium, creditors pessimistic expectations about the borrowers creditworthiness become self-fulfilling, and the borrower experiences a liquidity crisis. Multiple equilibria can be avoided by marketing the loan appropriately or by developing a reputation for following good policies. Liquidity problems can also arise because of the temporary disruption of international bond markets due to events unrelated to the borrowers circumstances. Policies responses are discussed.
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| Other form: | Print version: Detragiache, Enrica. Rational liquidity crises in the sovereign debt market. [Washington, D.C.] : International Monetary Fund, Research Dept., ©1996
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