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The Long and the Short of It: Sovereign Debt Crises and Debt Maturity

Fernández, Raquel; Martín, Alberto - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

We present a simple model of sovereign debt crises in which a country chooses its optimal mix of short and long-term debt contracts subject to standard contracting frictions: the country cannot commit to repay its debts nor to a specific path of future debt issues, and contracts cannot be made...

Persistent link: https://www.econbiz.de/10011213423

Risk Sharing with the Monarch: Excusable Defaults and Contingent Debt in the Age of Philip II, 1556-1598

Drelichman, Mauricio; Voth, Hans-Joachim - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

Contingent sovereign debt can create important welfare gains. Nonetheless, there is almost no issuance today. Using hand-collected archival data, we examine the first known case of large-scale use of state-contingent sovereign debt in history. Philip II of Spain entered into hundreds of...

Persistent link: https://www.econbiz.de/10010851380

Sovereign Debt Markets in Turbulent Times: Creditor Discrimination and Crowding-Out Effects

Broner, Fernando; Erce, Aitor; Martín, Alberto; … - Barcelona Graduate School of Economics (Barcelona GSE) - 2013

crisis erupted and pushed them into deep recessions, raising their deficits and debt levels. By 2010, they were facing severe …

Persistent link: https://www.econbiz.de/10010851405

Relationship and Transaction Lending in a Crisis

Bolton, Patrick; Freixas, Xavier; Gambacorta, Leonardo; … - Barcelona Graduate School of Economics (Barcelona GSE) - 2013

relationship banks gather information on their borrowers, which allows them to provide loans for profitable firms during a crisis … firms in a crisis. Using detailed credit register information for Italian banks before and after the Lehman Brothers …’ default, we are able to study how relationship and transaction-banks responded to the crisis and we test existing theories of …

Persistent link: https://www.econbiz.de/10011194312

Sovereign Default, Domestic Banks and Financial Institutions

Gennaioli, Nicola; Martìn, Alberto; Rossi, Stefano - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

We present a model of sovereign debt in which, contrary to conventional wisdom, government defaults are costly because they destroy the balance sheets of domestic banks. In our model, better financial institutions allow banks to be more leveraged, thereby making them more vulnerable to sovereign...

Persistent link: https://www.econbiz.de/10011019706

Rethinking the Effects of Financial Liberalization

Broner, Fernando; Ventura, Jaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

During the last few decades, many emerging markets have lifted restrictions on cross-border financial transactions. The conventional view was that this would allow these countries to: (i) receive capital in flows from advanced countries that would finance higher investment and growth; (ii)...

Persistent link: https://www.econbiz.de/10010851384

Why Do Emerging Economies Borrow Short Term?

Broner, Fernando; Lorenzoni, Guido; Schmukler, Sergio L. - Barcelona Graduate School of Economics (Barcelona GSE) - 2011

We argue that one reason why emerging economies borrow short term is that it is cheaper than borrowing long term. This is especially the case during crises, as in these episodes the relative cost of long-term borrowing increases. We construct a unique database of sovereign bond prices, returns,...

Persistent link: https://www.econbiz.de/10010851419

Financial Reforms and Capital Flows: Insights from General Equilibrium

Martin, Alberto; Ventura, Jaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

As a result of debt enforcement problems, many high-productivity firms in emerging economies are unable to pledge enough future profits to their creditors and this constrains the financing they can raise. Many have argued that, by relaxing these credit constraints, reforms that strengthen...

Persistent link: https://www.econbiz.de/10010851426

Why Do Emerging Economies Borrow Short Term?

Broner, Fernando A.; Lorenzoni, Guido; Schmukler, Sergio L. - Barcelona Graduate School of Economics (Barcelona GSE) - 2004

liquidity crisis, transferring risk to bondholders. In equilibrium, this risk is reflected in a higher risk premium and …

Persistent link: https://www.econbiz.de/10010547257

Systemic Crises and Growth

Ranciere, Romain; Tornell, Aaron; Westermann, Frank - Barcelona Graduate School of Economics (Barcelona GSE) - 2002

grown faster than countries with stable financial conditions. We measure the incidence of crisis with the skewness of credit …

Persistent link: https://www.econbiz.de/10010547262