Sovereign Debt: Default, Market Sanction, and Bailout

This paper explores the case of a sovereign indebted country facing a choice of economic policy today that will determine the country's ability to continue its debt servicing in the future. If the sovereign undertakes an unsound economic policy it will repudiate its debt with certainty; otherwise it will repudiate its debt with some positive probability. In our framework there is no court to enforce contracts. However, we assume the existence of a multilateral financial institution that could bailout the financially troubled sovereign country. Our focus is on the incentives created by the perspective of a bailout, as well as the punishment that the international financial markets could impose on the defaulting country, on today's economic policy. This essay provides a theoretical grounding for the IMF and other multilateral agencies intervention on the international financial markets showing that, unlike the idea that bailouts create both debtor and creditor moral hazard, it is sometimes a result of creditors' overreaction to the prospect of a liquidity crisis. The main result of the essay is that the multilateral will be better off bailing out the country regardless of the economic policy undertaken in order to avoid bigger losses from a generalized financial crisissovereign debt, default, bailout, creadible threat, market sanction

Chile's pension reform after twenty years

The aim of this paper is to describe the 1980 Chilean pension reform and to present its main results and economic impact. It is mainly descriptive; however we have tried to emphasize the lessons that may be learned and that may be of interest to other countries in different circumstances. In particular, we focus on potential areas for regulatory improvements. In Section II, a brief description of the AFP system and its place within Chile's social security system is presented. Also, the main characteristics of the transition from the"old"to the new system are sketched, together with the main changes in regulation after 1980. Section III includes a history of pension reform in Chile along with an analysis of the circumstances which may explain why the country decided to introduce such a radical reform. In Section IV, the performance of the AFP system is summarized. In Section V, the main economic effects of pension reform are discussed. Section VI presents our view regarding future development in the regulation of the AFP system. The paper concludes with some comments on the timing of possible regulatory changes.Pensions&Retirement Systems,Banks&Banking Reform,Insurance&Risk Mitigation,Environmental Economics&Policies,Gender and Law

Comment on "General Non-Markovian Dynamics of Open Quantum Systems"

The existence of a "non-Markovian dissipationless" regime, characterized by long lived oscillations, was recently reported for a class of quantum open systems (Zhang et al, PRL, 109, 170402, (2012)). It is claimed this could happen in the strong coupling regime, a surprising result which has attracted some attention. We show that this regime exists if and only if the total Hamiltonian is unbounded from below, casting serious doubts on the usefulness of this result

Idiopathic CD4+ T-lymphocytopenia with cryptococcal meningitis: first case report from Cambodia.

We report on a patient with cryptococcal meningitis with CD4+ T-lymphocytopenia and no evidence of HIV infection

Inovação em turismo: o estado como agente de inovação em turismo

Peer Reviewe

Redundancy of classical and quantum correlations during decoherence

We analyze the time dependence of entanglement and total correlations between a system and fractions of its environment in the course of decoherence. For the quantum Brownian motion model we show that the entanglement and total correlations have rather different dependence on the size of the environmental fraction. Redundancy manifests differently in both types of correlations and can be related with induced--classicality. To study this we introduce a new measure of redundancy and compare it with the existing one.Comment: 6 pages, 4 figure