The Twin Ds: Optimal Default and Devaluation
研究发现主权违约常伴随大幅货币贬值，提出一个模型解释这种“双重D”现象是最优政策结果，模型结合债务合同执行不力与名义工资刚性，说明违约在衰退期发生，贬值降低实际工资以减少失业。
A salient characteristic of sovereign defaults is that they are typically accompanied by large devaluations. This paper presents new evidence of this empirical regularity known as the Twin Ds and proposes a model that rationalizes it as an optimal policy outcome. The model combines limited enforcement of debt contracts and downward nominal wage rigidity. Under optimal policy, default is shown to occur during contractions. The role of default is to free up resources for domestic absorption, and the role of exchange rate devaluation is to lower the real value of wages, thereby reducing involuntary unemployment.