On Wars, Sanctions and Sovereign Default

Javier Bianchi and Cesar Sosa-Padilla

No 792, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: This paper explores the role of restrictions on the use of international reserves as economic sanctions. We develop a simple model of the strategic game between a sanctioning (creditor) country and a sanctioned (debtor) country. We show how the sanctioning country should impose restrictions optimally, internalizing the geopolitical benefits and the financial costs of a potential default from the sanctioned country.

Keywords: Wars; International reserves; Financial sanctions; Sovereign default (search for similar items in EconPapers)
JEL-codes: F30 F50 F51 (search for similar items in EconPapers)
Date: 2022-04-26
New Economics Papers: this item is included in nep-gth and nep-opm
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: On wars, sanctions, and sovereign default (2024)
Working Paper: On Wars, Sanctions and Sovereign Default (2022)
Working Paper: On Wars, Sanctions and Sovereign Default (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:94110

DOI: 10.21034/wp.792

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