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Replication data for: Optimal Sovereign Default

Version
V0
Resource Type
Dataset
Creator
  • Adam, Klaus
  • Grill, Michael
Publication Date
2017-01-01
Description
  • Abstract

    When is it optimal for a fully committed government to default on its legal repayment obligations? Considering a small open economy with domestic production risk and noncontingent government debt, we show that it is ex ante optimal to occasionally deviate from the legal repayment obligation and to repay debt only partially. This holds true even if default generates significant deadweight costs ex post. A quantitative analysis reveals that default is optimal only in response to persistent disaster-like shocks to domestic output. Applying the framework to the situation in Greece, we find that optimal default policies suggest a considerably larger and more timely default than the one actually implemented in the year 2012.
Availability
Download
Relations
  • Is supplemented by
    DOI: 10.1257/mac.20140093 (Text)
Publications
  • Adam, Klaus, and Michael Grill. “Optimal Sovereign Default.” American Economic Journal: Macroeconomics 9, no. 1 (January 2017): 128–64. https://doi.org/10.1257/mac.20140093.
    • ID: 10.1257/mac.20140093 (DOI)

Update Metadata: 2019-10-13 | Issue Number: 1 | Registration Date: 2019-10-13

Adam, Klaus; Grill, Michael (2017): Replication data for: Optimal Sovereign Default. Version: V0. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. http://doi.org/10.3886/E114091