Year: 2023
Type: article
Abstract: This paper explores the role of restrictions on the use of international reserves as economic sanctions.We develop a simple model of the strategic game between a sanctioning (creditor) country and a sanctioned (debtor) country.We show how the sanctioning country should impose restrictions optimally, internalizing the geopolitical benefits and the financial costs of a potential default from the sanctioned country.
Source: Journal of Monetary Economics
Authors: Javier Bianchi, César Sosa-Padilla
Institutions: Federal Reserve Bank of Minneapolis, University of Notre Dame
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4388037693