; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Self-Fulfilling Debt Dilution: Maturity and Multiplicity in Debt Models"; ; "batchuser@example.com"; ; "Amador, Manuel", "Aguiar, Mark"; "Federal Reserve Bank of Minneapolis"; "Self-fulfilling debt crises", "Debt dilution", "Sovereign debt", "Multiple equilibria"; "F34 - International Lending and Debt Problems"; "We establish that creditor beliefs regarding future borrowing can be self-fulfilling, leading to multiple equilibria with markedly different debt accumulation patterns. We characterize such indeterminacy in the Eaton-Gersovitz sovereign debt model augmented with long maturity bonds. Two necessary conditions for the multiplicity are: (i) the government is more impatient than foreign creditors, and (ii) there are deadweight losses from default; both are realistic and standard assumptions in the quantitative literature. The multiplicity is dynamic and stems from the self-fulfilling beliefs of how future creditors will price bonds; long maturity bonds are therefore a crucial component of the multiplicity. We introduce a third party with deep pockets to discuss the policy implications of this source of multiplicity and identify the potentially perverse consequences of traditional “lender of last resort” policies."^^; "2018-05-30"; "2019-05-17T13:33:58.152760516+00:00"^^; "https://doi.org/10.21034/sr.565"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "2020-09-01T15:39:09.292698005+00:00"^^; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "22", "4"; "Staff report (Federal Reserve Bank of Minneapolis. Research Department)"; "565"; "Debt dilution", "Sovereign debt", "Multiple equilibria", "Self-fulfilling debt crises"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; "Published in the _American Economic Review_ (Vol. 110, No. 9, September 2020, pp. 2783-2818) https://doi.org/10.1257/aer.20180831."^^; ; "Publication" . ; .