We analyze contagious sovereign debt crises in financially integrated economies. Under financial integration banks … optimally diversify their holdings of sovereign debt in an effort to minimize the costs with respect to an individual country …'s sovereign debt default. While diversification generates risk diversification benefits ex ante, it also generates contagion ex …

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

Fire sales are forced sales of assets in which high-valuation bidders are sidelined, typically due to debt overhang …

, portfolio investment, equity investment, and short-term debt. We follow about 100 countries during 1990-2010 when emerging …. Finally, the relationship between growth and short-term debt is nil before the crisis, and negative during the crisis …

Does short-term debt increase vulnerability to financial crisis, or does short-term debt reflect -- rather than cause … -- the incipient crisis? We study the role that short-term debt played in the collapse of the East Asian financial sector in … 1997-1998. We alleviate concerns about the endogeneity of short-term debt by using long-term debt obligations that matured …

investment, debt usage, and firm value. During the 1930-1938 Depression era, when the corporate sector was shocked by an …) and use more debt during the 1930s. We document similar effects for the number of outside directors on the board. Finally …

We study rollover risk and collateral value in a dynamic asset pricing model with endogenous debt financing by … news. We demonstrate the optimality of the maximum riskless short-term debt financing for optimistic borrowers even in the …