and borrowers ample reason to care whether nonperforming debts are restructured. One implication of the way in which debt … argument is moral hazard, but (unlike in much of the recent literature of emerging market debt problems) what is central here …

Debt maturity influences debt overhang: the reduced incentive for highly- levered borrowers to make real investments … because some value accrues to debt. Reducing maturity can increase or decrease overhang even when shorter-term debt's value … depends less on firm value. Future overhang is more volatile for shorter-term debt, making future investment incentives …

costs of subsidizing corporate debt from the existing literature. Our theory also sheds light on why the IRS considers …We illustrate the welfare benefit of tax subsidies to corporate debt financing. Two firms engage in a socially wasteful … amount of debt financing, resulting in a two dimensional war of attrition. Debt financing increases incentives to exit, which …

We analyze the empirical determinants of liquidity in debt markets in light of predictions stemming from debt …, including those that predict a``hockey-stick" relation between bond liquidity and underlying fundamental value. When debt is … towards the left tail, the value of debt becomes informationally sensitive and less liquid. We alleviate endogeneity concerns …

periods when the ratio of government debt to total debt is higher; and ii) by firms with stronger balance sheets. Our theory …We argue that time-series variation in the maturity of aggregate corporate debt issues arises because firms behave as … debt. We document that when the government funds itself with relatively more short-term debt, firms fill the resulting gap …

used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed … shift from bank finance to bond finance, at a time when the cost of market debt rose above the cost of bank loans. We show … instruments of debt finance are important to shield the economy from adverse real effects of a financial crisis …

drying up of liquidity. Financial firms raise short-term debt in order to finance asset purchases. When asset fundamentals … worsen, debt induces firms to risk-shift; this limits their funding liquidity and their ability to roll over debt. Firms may … to future prospects. In particular, short-term debt is relatively cheap to issue in good times when expectations of asset …

risks either. Yet in line with theory, we find that the economic costs of corporate debt booms rise when inefficient debt …With business leverage at record levels, the effects of corporate debt overhang on growth and investment have become a … prominent concern. In this paper, we study the effects of corporate debt overhang based on long-run cross-country data covering …

We analyze government interventions to alleviate debt overhang among banks. Interventions generate two types of rents …