@article{8726353,
  abstract     = {{This paper investigates the trade-offs of introducing an extra line of credit in an emergency situation with a quantitative sovereign default model. I show that temporary access to these lines for up to 3 percent of mean annual income during low liquidity periods yields long-term effects with a lower cost of borrowing but with incentives to accumulate higher debt. Permanent access, however, has only short-lived effects because temporal arrangement better completes the markets and induces market discipline as the government worries about rollover risk once the low liquidity period ends. I also present in an event analysis that Mexico's arrangement of swap lines with the Federal Reserve amid the global financial crisis in 2008 helped avoid a potential debt crisis.}},
  articleno    = {{102772}},
  author       = {{Önder, Yasin Kursat}},
  issn         = {{0304-3878}},
  journal      = {{JOURNAL OF DEVELOPMENT ECONOMICS}},
  keywords     = {{Sovereign default,Liquidity shocks,Swap lines,SUDDEN STOPS,DEFAULT,DEBT,RESERVES,MATURITY,MODEL}},
  language     = {{eng}},
  pages        = {{20}},
  title        = {{Liquidity crises, liquidity lines and sovereign risk}},
  url          = {{http://doi.org/10.1016/j.jdeveco.2021.102772}},
  volume       = {{154}},
  year         = {{2022}},
}

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