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Empirical Research on Sovereign Debt and Default
Tomz, Michael - 2013
correspondence between theory and data …
Persistent link: https://www.econbiz.de/10013085914
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Sovereign Debt, Government Myopia, and the Financial Sector
Acharya, Viral V. - 2011
What determines the sustainability of sovereign debt? We develop a model where myopic governments seek popularity but can nevertheless commit credibly to service external debt. They do not default when debt is low because they would lose access to debt markets and be forced to reduce spending;...
Persistent link: https://www.econbiz.de/10013119044
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Banks, Sovereign Debt and the International Transmission of Business Cycles
Guerrieri, Luca - 2012
This paper studies the international propagation of sovereign debt default. We posit a two-country economy where capital constrained banks grant loans to firms and invest in bonds issued by the domestic and the foreign government. The model economy is calibrated to data from Europe, with the two...
Persistent link: https://www.econbiz.de/10013101824
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Sovereign Debt and Consumption Smoothing
Grossman, Herschel I. - 2008
This paper shows that whether or not a sovereign can borrow to smooth consumption depends both on how consumption smoothing is achieved, whether by contingent debt issuance or by contingent debt servicing, and on the exact nature of the penalty for debt repudiation. If a sovereign that...
Persistent link: https://www.econbiz.de/10012774949
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Fiscal Rules and Sovereign Default
Alfaro, Laura - 2017
Recurrent concerns over debt sustainability in emerging and developed nations have prompted renewed debate on the role of fiscal rules. Their optimality, however, remains unclear. We provide a quantitative analysis of fiscal rules in a standard model of sovereign debt accumulation and default...
Persistent link: https://www.econbiz.de/10012957369
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Partial Default
Arellano, Cristina - 2019
initially increase and do not experience reductions upon resolution. This paper presents a theory of sovereign default that … replicates these properties, which are absent in standard sovereign default theory. Partial default is a flexible way to raise … as the defaulted debt accumulates and interest rate spreads increase. This theory is capable of rationalizing the large …
Persistent link: https://www.econbiz.de/10012866180
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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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Optimal Domestic (and External) Sovereign Default
D'Erasmo, Pablo - 2016
Infrequent but turbulent episodes of outright sovereign default on domestic creditors are considered a “forgotten history” in Macroeconomics. We propose a heterogeneous-agents model in which optimal debt and default on domestic and foreign creditors are driven by distributional incentives...
Persistent link: https://www.econbiz.de/10012985197
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Reputation and Sovereign Default
Amador, Manuel; Phelan, Christopher - 2021
This paper presents a continuous-time model of sovereign debt. In it, a relatively impatient sovereign government's hidden type switches back and forth between a commitment type, which cannot default, and an optimizing type, which can default at any time, and assume outside lenders have...
Persistent link: https://www.econbiz.de/10013224123
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Sovereign Debt : a Review
Aguiar, Mark - 2013
In this chapter, we use a benchmark limited-commitment model to explore key issues in the economics of sovereign debt. After highlighting conceptual issues that distinguish sovereign debt as well as reviewing a number of empirical facts, we use the model to discuss debt overhang, risk sharing,...
Persistent link: https://www.econbiz.de/10013076910