without commitment. This policy features a state-contingent macroprudential debt tax that is strictly positive at date t if a …, removes fat tails from the distribution of returns, and increases social welfare. In contrast, constant debt taxes are …

A firm chooses its debt maturity structure and default timing dynamically, both without commitment. Via the fraction of … decision. A shortening equilibrium with accelerated default emerges when cash-flows deteriorate over time so that debt recovery …

This paper studies optimal monetary policy under dynamic debt deleveraging once the zero bound is binding. Unlike the …

Deleveraging from high debt can provoke deep recession with significant international side effects. The exchange rate …

We develop a dynamic model of debt runs on a firm, which invests in an illiquid asset by rolling over staggered short …-term debt contracts. We derive a unique threshold equilibrium, in which creditors coordinate their asynchronous rollover … the roles played by volatility, illiquidity and debt maturity in driving debt runs, as well as on firms' capital adequacy …

Equilibrium in the market for real assets requires that the price of those assets be bid up to reflect the tax shields … optimally levered firms. The standard measure of the advantage to leverage compares the values of levered and unlevered assets …, and can be misleading and difficult to interpret. We show that a meaningful measure of the advantage to debt is the extra …

We examine the differential impact of portfolio debt, portfolio equity, and FDI inflows on 37 manufacturing industries … cross-sectional regressions of manufacturing industries' growth rates covering 17 years. Net portfolio debt inflows are … negatively associated with growth during the mid 1990s. The magnitudes of the negative effect of surges in portfolio debt inflows …

Government guarantees of private debt deplete equity. The depletion is greatest during periods when the probability of … debt up to the limit the government permits. Declines in asset values raise debt in relation to asset values and thus … asset values to market. Less widely recognized is that guaranteed debt creates an incentive to pay equity out to owners …

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 …