Competitive equilibria with limited enforcement
By: Patrick J. Kehoe and Fabrizio Perri.
Contributors: Perri, Fabrizio.
Series: Federal Reserve Bank of Minneapolis, Research Department staff report ;; 307; Staff report (Federal Reserve Bank of Minneapolis. Research Dept. : Online) ;; 307.
Publisher: Federal Reserve Bank of Minneapolis
Published: 2003
Place of publication: [Minneapolis, Minn.]
Language: eng
Format: Electronic resource
Description: "We show how to decentralize constrained efficient allocations that arise from enforcement constraints between sovereign nations.In a pure exchange economy, these allocations can be decentralized with private agents acting competitively and taking as given government default decisions on foreign debt.In an economy with capital, these allocations can be decentralized if the government can tax capital income as well as default on foreign debt.The tax on capital income is needed to make private agents internalize a subtle externality.The decisions of the government can arise as an equilibrium of a dynamic game between governments"--Federal Reserve Bank of Minneapolis web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/15/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.