Online Appendix to “A Model of the International Monetary System”
نویسندگان
چکیده
(A.1) Rē− R̄r = γ[2b(R2σ2 e + σ2 − 2R σ σe) + 2w∗ R σ σe − 2w∗ σ2], where ē = E+[e] and σe = Var+(e). Suppose agents were expecting debt to be safe, then ē = 1 and σe = 0, so we have Rs(b) = R̄r + γ[2bσ2 − 2w∗ σ2] = R̄r − 2γ(w∗ − b)σ2. This proves the first part of the proposition. Suppose agents were expecting Hegemon debt to be risky, then ē = R̄/RH and σe = σ/R r H since we assumed eL = RL/R r H . Substituting these expressions into (A.1) and solving for R as a function of b, we have two roots
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