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What is the Risk of European Sovereign Debt Defaults? Fiscal Space, CDS Spreads and Market Pricing of Risk

Aizenman, Joshua - 2011

We estimate the pricing of sovereign risk for sixty countries based on fiscal space (debt/tax; deficits/tax) and other economic fundamentals over 2005-10. We measure how accurately the model predicts sovereign credit default swap (CDS) spreads, focusing in particular on the five countries in the...

Persistent link: https://www.econbiz.de/10012461251

The Forgotten History of Domestic Debt

Reinhart, Carmen M. - 2008

There is a rich scholarly literature on sovereign default on external debt. Comparatively little is known about sovereign defaults on domestic debt. Even today, cross-country data on domestic public debt remains curiously exotic, particularly prior to the 1980s. We have filled this gap in the...

Persistent link: https://www.econbiz.de/10012464703

Internal Debt Crises and Sovereign Defaults

Arellano, Cristina - 2008

In this paper, we use data from developing countries to argue that sovereign defaults are often caused by fiscal pressures generated by large-scale domestic defaults. We argue that these systemic domestic defaults are caused by shocks best interpreted as being non-fundamental. We construct a...

Persistent link: https://www.econbiz.de/10012464852

Sustainability, Debt Management, and Public Debt Policy in Japan

Doi, Takero - 2006

There are two ways to eliminate this distortion toward successful fiscal restoration. One of them is to make the monetary authority more conservative than society in the sense that the price stability weight of monetary authority is higher than that of society. The other way of eliminating the...

Persistent link: https://www.econbiz.de/10012466308

Individual Versus Aggregate Collateral Constraints and the Overborrowing Syndrome

Uribe, Martín - 2006

This paper compares the equilibrium dynamics of an economy facing an aggregate collateral constraint on external debt to the dynamics of an economy facing a collateral constraint imposed at the level of each individual agent. The aggregate collateral constraint is intended to capture an...

Persistent link: https://www.econbiz.de/10012466408

A Brazilian Debt-Crisis Model

Razin, Assaf - 2002

We develop a model that captures important features of debt crises of the Brazilian type. Its applicability to Brazil lies in the fact that (1) in Brazil the macro fundamentals were sound (e.g., a primary surplus, a relatively low debt/GDP ratio, etc.); and (2) in the Brazilian case the trigger...

Persistent link: https://www.econbiz.de/10012469498

A Brazilian Debt-Crisis

Razin, Assaf - 2002

We develop a stylised model of multiple equilibria, with country risk spreads at the focus of the analysis. Fears that the country default on its debt triggers a reversal in the direction of inflows of international financial capital raise interest-rate spreads and thus the cost of servicing the...

Persistent link: https://www.econbiz.de/10012469550

Debt Restructuring

Friedman, Benjamin M. - 2000

What difference does it make, and for whom, whether the nonperforming debts of emerging market borrowers are restructured? This paper begins by positing a set of counterfactual conditions under which restructuring would not matter, and then shows how several ways in which the actual world of...

Persistent link: https://www.econbiz.de/10012471039

Macroeconomic Effects of Debt Relief : Consumer Bankruptcy Protections in the Great Recession

Auclert, Adrien - 2019

This paper argues that the debt forgiveness provided by the U.S. consumer bankruptcy system helped stabilize employment … levels during the Great Recession. We document that over this period, states with more generous bankruptcy exemptions had …-post debt forgiveness provided by the consumer bankruptcy system during the Great Recession increased aggregate employment by …

Persistent link: https://www.econbiz.de/10012479637