Tag Archives: Signalling

Economic Journal, February 2021, with Harris Dellas. PDF. We study the optimal debt and investment decisions of a sovereign with private information. The separating equilibrium is characterised by a cap on the current account. A sovereign repays debt amount due that exceeds default costs in order to signal creditworthiness and smooth consumption. Accepting funding conditional on investment/reforms relaxes borrowing constraints, even when investment does not create collateral, but it...

Economic Journal, forthcoming, with Harris Dellas. PDF. We study the optimal debt and investment decisions of a sovereign with private information. The separating equilibrium is characterized by a cap on the current account. A sovereign repays debt amount due that exceeds default costs in order to signal creditworthiness and smooth consumption. Accepting funding conditional on investment/reforms relaxes borrowing constraints, even when investment does not create collateral, but it...

A new book by Bryan Caplan. It’s the signalling case.

In a CEPR discussion paper, Jan van Ours and Yuxin Yao conclude that in the Netherlands, for male workers there is a significant wage penalty of dialect-speaking while for female workers there is no significant difference.