Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320277 
Year of Publication: 
2024
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 19 [Issue:] 4 [Year:] 2024 [Pages:] 1659-1700
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
Dynamic policy games feature a wide range of equilibria. This paper provides a methodology for obtaining robust predictions. We focus on a model of sovereign debt, although our methodology applies to other settings, such as models of monetary policy or capital taxation. Our main result is a characterization of distributions over outcomes that are consistent with a subgame perfect equilibrium conditional on the observed history. We illustrate our main result by computing-conditional on an observed history-bounds across all equilibria on the maximum probability of a crisis: means, variances, and covariances over debt prices.
Subjects: 
correlated equilibrium
moment inequalities
Multiple equilibria
policy games
robustness
JEL: 
C73
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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