In the last two decades, financial integration has increased dramatically across the world. At the same time, the fraction of countries in default has more than doubled. Contrary to theory, however, there appears to have been no substantial improvement in the degree of international risk...

Features of sovereign debts restructuring in 1980s and 1990s are quite different in two aspects. One is that the renegotiation periods are longer in 1980s than in 1990s, in spite of the fact that sovereign borrowing in 1980s is mainly bank loans with several big creditors, while in 1990s it is...

This paper builds a dynamic model of borrowing and default to study the term structure of sovereign bonds in emerging markets. The borrower in the model can buy short and long bonds at contingent prices that reflect the timing of default events. The model generates a yield curve that is upward...