A Gravity Model of Sovereign Lending: Trade, Default and Credit
FRB of San Francisco Working Paper No. 2002-09
20 Pages Posted: 10 May 2005
There are 2 versions of this paper
A Gravity Model of Sovereign Lending: Trade, Default and Credit
A Gravity Model of Sovereign Lending: Trade, Default and Credit
Date Written: August 2002
Abstract
One reason why countries service their external debts is the fear that default might lead to shrinkage of international trade. If so, then creditors should systematically lend more to countries with which they share closer trade links. We develop a simple theoretical model to capture this intuition, then test and corroborate this idea.
Keywords: Theory, empirical, panel, bilateral, bank, loan
JEL Classification: F15, F33
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Carmen Reinhart, Kenneth Rogoff, ...
-
International Institutions for Reducing Global Financial Instability
-
By Jonathan Eaton and Raquel Fernández
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
One Reason Countries Pay Their Debts: Renegotiation and International Trade
-
Can Output Losses Following International Financial Crises Be Avoided?
-
Defaultable Debt, Interest Rates and the Current Account
By Mark Aguiar and Gita Gopinath
-
Defaultable Debt, Interest Rates, and the Current Account
By Mark Aguiar and Gita Gopinath
-
Have Commercial Banks Ignored History?
By Sule Ozler