Chatterjee, Satyajit; Eyigungor, Burcu - In: American Economic Review 102 (2012) 6, pp. 2674-99
We advance quantitative-theoretic models of sovereign debt by proving the existence of a downward sloping equilibrium price function for long-term debt and implementing a novel method to accurately compute it. We show that incorporating long-term debt allows the model to match Argentina's...