Resumen
Dynamic policy games feature a wide range of equilibria. This paper provides a methodology for obtaining robust predictions. We focus on a model of sovereign debt, although our methodology applies to other settings, such as models of monetary policy or capital taxation. Our main result is a characterization of distributions over outcomes that are consistent with a subgame perfect equilibrium conditional on the observed history. We illustrate our main result by computing—conditional on an observed history—bounds across all equilibria on the maximum probability of a crisis: means, variances, and covariances over debt prices.
Idioma original | Inglés |
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Páginas (desde-hasta) | 1659-1700 |
Número de páginas | 42 |
Publicación | Theoretical Economics |
Volumen | 19 |
N.º | 4 |
DOI | |
Estado | Publicada - nov. 2024 |
Nota bibliográfica
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