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 …

This paper compares the equilibrium dynamics of an economy facing an aggregate collateral constraint on external debt … central finding of the paper is that the economy with the aggregate borrowing limit does not generate higher levels of debt …

We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the … first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and … the repayment -- under the assumption that some debt contract is optimal. In the second part we consider a more general …

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 …