Underinvestment and capital misallocation under sovereign risk

IF 3.8 1区经济学 Q1 ECONOMICS

Journal of International Economics Pub Date : 2024-07-24 DOI:10.1016/j.jinteco.2024.103973

Carlos Esquivel

引用次数: 0

Abstract

Capital and its sectoral allocation affect default incentives. Under general assumptions, default risk is decreasing in the total stock of capital and increasing in the share of capital allocated to non-tradable production. This implies that when competitive households make all investment decisions capital has two externalities: a capital-stock externality and a portfolio externality. These hamper the ability of a benevolent government to make optimal borrowing and default decisions and are exacerbated during periods of distress. Competitive equilibria feature underinvestment, larger non-traded sectors, more default, and lower debt and consumption than a centralized planner’s allocation.

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主权风险下的投资不足和资本配置不当

资本及其部门分配影响违约动机。在一般假设下，违约风险随资本总存量的减少而减少，随分配给非贸易生产的资本份额的增加而增加。这意味着，当竞争性家庭做出所有投资决策时，资本有两个外部性：资本存量外部性和投资组合外部性。这些外部性阻碍了仁慈的政府做出最优借贷和违约决策的能力，并在经济困难时期加剧。与中央计划者的分配相比，竞争性均衡的特点是投资不足、非贸易部门扩大、违约增多以及债务和消费减少。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Economics ECONOMICS-

CiteScore

5.80

自引率

6.10%

发文量

期刊介绍： The Journal of International Economics is intended to serve as the primary outlet for theoretical and empirical research in all areas of international economics. These include, but are not limited to the following: trade patterns, commercial policy; international institutions; exchange rates; open economy macroeconomics; international finance; international factor mobility. The Journal especially encourages the submission of articles which are empirical in nature, or deal with issues of open economy macroeconomics and international finance. Theoretical work submitted to the Journal should be original in its motivation or modelling structure. Empirical analysis should be based on a theoretical framework, and should be capable of replication.