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Sovereign Debt
Eaton, Jonathan - 2010
We review the literature on sovereign debt. We organize our survey around three central questions: (1) Why do sovereign debtors ever repay their debts? (2) What burdens, in the form of distortions and inefficiencies, does sovereign debt impose? and (3) How might debt be restructured to reduce...
Persistent link: https://www.econbiz.de/10012763742
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Security Baskets and Index-Linked Securities
Gorton, Gary B. - 2010
Security baskets and index-lined securities are securities whose values are functions of the cash flows or values of … other assets. Creation of these "composite" securities would seem to be redundant since investors can cost1ess1y replicate … them. In this paper we study the existence and optimal design of composite securities. We first show that when some …
Persistent link: https://www.econbiz.de/10013138948
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Selective Swap Arrangements and the Global Financial Crisis : Analysis and Interpretation
Aizenman, Joshua - 2010
The onset of the US credit crisis in 2008, and its rapid globalization induced the FED to extend unprecedented swap-lines of 30 billion dollars to four emerging markets, and the proliferation of other cross-countries selective swap arrangements. This paper explores the logic for these...
Persistent link: https://www.econbiz.de/10012757667
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Holdouts in Sovereign Debt Restructuring : A Theory of Negotiation in a Weak Contractual Environment
Pitchford, Rohan - 2011
Why is it difficult to restructure sovereign debt in a timely manner? In this paper we present a theory of the sovereign debt restructuring process in which delay arises as individual creditors hold-up a set- tlement in order to extract greater payments from the sovereign. We then use the theory...
Persistent link: https://www.econbiz.de/10013132010
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Take the Short Route : How to Repay and Restructure Sovereign Debt with Multiple Maturities
Aguiar, Mark - 2013
We address the question of whether and how a sovereign should reduce its external indebtedness when default is a significant possibility, with a particular focus on whether a sovereign should buy back or dilute existing long-term sovereign bonds. Our main finding is that when reduction of debt...
Persistent link: https://www.econbiz.de/10013071800
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Take the Short Route : Equilibrium Default and Debt Maturity
Aguiar, Mark - 2016
We study the interactions between sovereign debt default and maturity choice in a setting with limited commitment for repayment as well as future debt issuances. Our main finding is that under a wide range of conditions the sovereign should, as long as default is not preferable, remain passive...
Persistent link: https://www.econbiz.de/10012978844
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Sargent-Wallace Meets Krugman-Flood-Garber, or : Why Sovereign Debt Swaps Don'T Avert Macroeconomic Crises
Aizenman, Joshua; Kletzer, Kenneth M.; Pinto, Brian - 2021
This paper argues that the frequent failure of the debt swaps is not an accident. Instead, it follows from fundamental forces driven by the market's assessment of the scarcity of fiscal revenue relative to the demand for fiscal outlays. It follows from the observation that arbitrage forces...
Persistent link: https://www.econbiz.de/10013247628
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Debt Restructuring
Friedman, Benjamin M. - 2021
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/10013248231
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Sovereign Debt Restructurings : Panacea or Pangloss?
Bulow, Jeremy; Rogoff, Kenneth - 2021
The most widely proposed LDC debt plans are flawed by their failure to recognize the fundamental differences between corporate and sovereign debt. Consequently, many plans intended to help highly-indebted countries mainly aid their foreign creditors. This paper emphasizes the crucial distinction...
Persistent link: https://www.econbiz.de/10013212596
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On the Gains to International Trade in Risky Financial Assets
Davis, Steven J. - 2001
This paper develops and implements a framework for quantifying the gains to international trade in risky financial assets. The framework can handle may agents, many assets, incomplete markets and limited participation in asset markets. It delivers closed-form analytic solutions for consumption,...
Persistent link: https://www.econbiz.de/10012788068