The paper presents a three period model that studies the eects of IMF loans on borrowers’ and lenders’ welfare … highlighting the fact that the IMF has both de jure and de facto seniority rights over private creditors. It is shown that an IMF … IMF intervention always makes the borrower country better off. The eects on non-senior lenders depend on the size of the …

debt denominated in hard currencies, or indexed to tradable goods prices. How can a fiscal authority tell if the stock of … public debt is consistent with fiscal solvency in this environment? This paper proposes a quantitative framework that aims to … uncertainty affects debt dynamics when asset markets are incomplete. A government making a credible commitment to repay cannot …