We develop a dynamic model of sovereign default and renegotiation to study how expectations of default and debt restructuring in the near future affect the ex ante maturity structure of sovereign debts. This paper argues that the average maturity is shorter when a country is approaching...

Emerging market economies typically experience procyclical public expenditures and private consumption, countercyclical default risk, interest rate spreads, current account and inflation tax rates as well as and higher volatility in consumption than in output. We develop a quantitative...

We study a standard quantitative model of sovereign default in which the government in a small open economy (SMO) decides how much to save and whether to default on its debt. In contrast with previous quantitative studies, we do not assume that a defaulting country is exogenously excluded from...