state and regulators are not necessarily independent. Among other things, we show that firms invest more, issue more debt …

leveraged banks’ precautionary demand for liquidity. When adverse asset shocks materialize, a bank’s ability to roll over debt … increasing, or conversely its willingness to provide term lending is decreasing, in its rollover risk over the term of the loan …

on debt dynamics for the eight new member states from Central and Eastern Europe. We find that the nominal Maastricht … achieve the fiscal criteria. Our results suggest all countries would find it harder to restrain debt growth within the euro …, but that the magnitude of this effect varies substantially across countries, as do the debt dynamics outside the euro. If …

restructuring are offset by the moral hazard and default risk associated with the presence of renegotiation-friendly loan provisions. …

governments only issue one-period risk-free bonds. We discuss the implications of this for the optimality of debt limits, debt …The aim of this Paper is to test for the extent of incompleteness in the market for US Government debt. We show that … when a government pursues an optimal tax policy and issues a full set of contingent claims, the value of debt has the same …

, together with drastic budgetary cuts aiming at curbing public debt to maintain sustainability. Finally, the paper tries to …

, stochastic environment. Keeping the firm as an ongoing concern has an option value but equity and debt holders value it … option approach, we characterize the resulting agency costs of debt, derive the ‘price’ of these costs and analyse their … dynamics. We also show how agency costs can be reduced by the design of debt and the possibility of renegotiation. …