Click here for search results
International lending, sovereign debt and joint liability : an economic theory model for amending the treaty of Lisbon, Volume 1
 
Author:Basu , Kaushik; Stiglitz, Joseph E.; Country:Europe;
Date Stored:2013/08/13Document Date:2013/08/01
Document Type:Policy Research Working PaperSubTopics:Bankruptcy and Resolution of Financial Distress; Access to Finance; Economic Theory & Research; Debt Markets; Banks & Banking Reform
Language:EnglishRegion:Europe and Central Asia
Report Number:WPS6555Collection Title:Policy Research working paper ; no. WPS 6555
Volume No:1  

Summary: As the Eurozone crisis drags on, it is evident that a part of the problem lies in the architecture of debt and its liabilities within the Eurozone and, more generally, the European Union. This paper argues that a large part of the problem can be mitigated by permitting appropriately-structured cross-country liability for sovereign debt incurred by individual nations within the European Union. In brief, the paper makes a case for amending the Treaty of Lisbon. The case is established by constructing a game-theoretic model and demonstrating that there exist self-fulfilling equilibria, which would come into existence if cross-country debt liability were permitted and which are Pareto superior to the existing outcome.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 31 pagesOfficial version*2.17 (approx.)
TextText version**
How To Order

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/1I7IN3J130