Discuss this statement using a simple intertemporal model

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Question: Lack of commitment reduces the ability of a country to access international capital markets. Discuss this statement using a simple intertemporal model (2-period model). Examine first the case when there are no costs of default. Afterwards, examine the case when there are costs of default. Suppose that output in period 1 is smaller than output in period 2.

Reference no: EM133328082

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