Imbs, Jean; Ranciere, Romain - Institut für Schweizerisches Bankwesen <Zürich> - 2005
overhang level of debt is reached: (i) investment falls precipitously as it should when it becomes optimal to default, (ii …-empt default and exact punitive interest rates. We find a systematic response of investment, particularly when property rights are … with concessional rates. Thus, while debt relief is likely to improve economic policy (and especially investment) in …