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Crisis and Commitment: Inflation Credibility and the Vulnerability to Sovereign Debt Crises. Mark Aguiar, Manual Amador, Emmanuel Farhi, and Gita Gopinath, 2013, Paper. "We explore the role of inflation credibility in self-fulfilling debt crises. In particular, we propose a continuous time model of nominal debt with the potential for self-fulfilling debt crises as in Calvo (1988) and Cole and Kehoe (2000). We characterize crisis equilibria conditional on the level of commitment to low inflation. With strong commitment, which can be interpreted as joining a monetary union or issuing foreign currency debt, the environment..." Link