Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2011-02-11
Number: 11-027/2
Author-Name: Andreas Schabert
Author-Workplace-Name: TU Dortmund University, and University of Amsterdam
Title: Exchange Rate Policy under Sovereign Default Risk
Abstract: We examine monetary policy options for a small open economy where sovereign default might occur due to intertemporal insolvency. Under interest rate policy and floating exchange rates the equilibrium is indetermined. Under a fixed exchange rate the equilibrium is uniquely determined and independent of sovereign default.
Classification-JEL: E52, E63, F31, F41
Keywords: Exchange rate peg, interest rate policy, equilibrium determination, sovereign default, public debt
File-Url: https://papers.tinbergen.nl/11027.pdf
File-Format: application/pdf
File-Size: 169628 bytes
Handle: RePEc:tin:wpaper:20110027