| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 963125 | Journal of International Economics | 2012 | 13 Pages |
Abstract
⺠Private foreign borrowing rises substantially over time in developing countries. ⺠This paper analyzes decentralized borrowing under centralized default. ⺠Private agents do not internalize adverse effects of their debt and overborrow. ⺠Decentralized borrowing increases credit cost and default risk, reducing welfare. ⺠Decentralized borrowing may lead to too much or too little equilibrium debt.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Yun Jung Kim, Jing Zhang,