Much of the sovereign default literature (e.g., Arellano (2008), Bulow and Rogoff (1989)), considers that sovereign default is strategic: i.e., defaults occurs if the current benefits outweigh discounted future costs.

Looking at historical default incidents, however, it seems more likely that governments default when they are hit by a shock (such as a change in commodity prices) and simply can't pay their bills.

I've looked at the literature and have had difficulty finding an analysis of which historical defaults might be considered strategic and which involuntary. Is there such a distinction in the literature?



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