TY  - JOUR
AU  - Dooley,Michael P.
AU  - Verma,Sujata
TI  - Rescue Packages and Output Losses Following Crises
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8315
PY  - 2001
Y2  - June 2001
UR  - http://www.nber.org/papers/w8315
L1  - http://www.nber.org/papers/w8315.pdf
N1  - Author contact info:
Michael P. Dooley
Department of Economics
Engineering II
University of California, Santa Cruz
Santa Cruz, CA 95064
Tel: 831/459 3662
Fax: 831/459-5077
E-Mail: MPD@UCSC.EDU

Sujata Verma
M1  - published as Michael P. Dooley, Sujata Verma. "Rescue Packages and Output Losses Following Crises," in Michael P. Dooley and Jeffrey A. Frankel, editors, "Managing Currency Crises in Emerging Markets" University of Chicago Press (2003)

AB  - This paper examines the role of the third party (the IMF) in resolving sovereign default on external debt.  We first show that the effects of third party intervention in debt negotiations are quite sensitive to the assumed enforcement mechanism for sovereign debt.  The model is then adapted to an insurance crisis.  The main result is that the unanticipated component of third party intervention can either intensify or mitigate the dead weight loss following default.
ER  -