Por razones de fuerza mayor, se suspende seminario.

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El Departamento de Economía de la Universidad de Chile tiene el agrado de invitar a usted a un nuevo Seminario Académico:

Título - The Political Economy of Sovereign Defaults

Autores - Eugenia Andreasen (Universidad de Santiago de Chile), Guido Sandleris (Universidad Torcuato Di Tella), Alejandro Van der Ghote (Princeton University).

Presenta - Eugenia Andreasen (Universidad de Santiago de Chile)

Abstract - [Working Paper 2011] The literature on sovereign default has assumed that governments have unlimited access to the resources of the economy if they decide to repay their sovereign debts. However sovereign debt repayment typically depends on the implementation of fiscal programs that require a minimum level of political support. In the buildup of sovereign debt crises, this political support has proved difficult to achieve for many governments. In this paper, we analyze how the presence of political constraints affects sovereign governments’ borrowing and default decisions. We do so in a standard DSGE model with endogenous default risk where we introduce two novel features: heterogeneous agents in the domestic private sector and a requirement that the government garners some of their support to implement a fiscal program needed to repay the debt. In this framework, we show that there can be different types of sovereign default events. Default can arise because the government is unwilling to repay, in the best tradition of the sovereign debt literature, but also due to insufficient political support even if a benevolent government would prefer to repay. We calibrate the model to the Argentine and Greek economies and show that once political constraints are taken into account the matching with the data of standard sovereign debt models is weaker than previously understood.

El  Seminario  se realizará el miércoles 10 de diciembre de 13:00 a 14:00 hrs, en  la Sala P-307 Tercer Piso del edificio Placa de la Facultad de Economía y Negocios de la Universidad de Chile, ubicada en Diagonal Paraguay 257.