Can debt crises be self-fulfilling?

Several papers argue that debt crises can be the result of self-fulfilling expectations that no one will lend to a country. This IMF Working Paper says this type of coordination failure can be eliminated by a combination of state-contingent securities and a mechanism that allows investors to promise to lend only if enough other investors do so as well.

This suggests, according to the author Marcos Chamon, that runs on the debt of a single borrower (such as the government) can be eliminated, and

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