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International financial integration, sovereignty, and constraints on macroeconomic policies /
This paper considers the consequences of international financial market integration for national fiscal and monetary policies that derive from the absence of an international sovereign authority to define and enforce contractual obligations across borders. The sovereign immunity of national governme...
| Clasificación: | Libro Electrónico |
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| Autor principal: | |
| Otros Autores: | |
| Formato: | Electrónico eBook |
| Idioma: | Inglés |
| Publicado: |
[Washington, D.C.] :
International Monetary Fund, IMF Institute,
2006.
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| Colección: | IMF working paper ;
WP/06/79. |
| Temas: | |
| Acceso en línea: | Texto completo |
| Sumario: | This paper considers the consequences of international financial market integration for national fiscal and monetary policies that derive from the absence of an international sovereign authority to define and enforce contractual obligations across borders. The sovereign immunity of national governments serves as a fundamental constraint on international finance and is used to derive intertemporal budget constraints for sovereign nations and their governments. It is shown that the appropriate debt limit for a country allows for state-contingent repayment. With noncontingent debt instruments, debt renegotiation occurs in equilibrium with positive probability. A model of tax smoothing is adopted to show how information imperfections lead to conventional bond contracts that are renegotiated when a critical level of indebtedness is reached. Renegotiation is interpreted in terms of nominal and real denominated bonds, and implications are drawn about the intertemporal borrowing constraint for monetary policies, the accumulation of reserve assets, and current account sustainability. |
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| Descripción Física: | 1 online resource (24 pages). |
| Bibliografía: | Includes bibliographical references. |
| ISBN: | 1283511894 9781283511896 9781451908749 1451908741 146239521X 9781462395217 1452772347 9781452772349 9786613824349 6613824348 |
| ISSN: | 2227-8885 2227-8885 ; |