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 these burdens? In grappling with the first question the literature has …

We present a simple model of sovereign debt crises in which a country chooses its optimal mix of short and long … future debt issues, and contracts cannot be made state contingent nor renegotiated. We show that, in order to reduce … incentives to engage in debt dilution, the country must issue short-term debt. This exposes it to roll-over crises and …

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 … as they mature but never actively issuing or buying back such bonds. The only active debt-management margin is the short …

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 repudiated its debt could not borrow again, but could continue to save and … to dissave, then contingent debt issuance, without contingent debt servicing, cannot support a positive amount of …

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; they do not default as debt builds up, and net new borrowing becomes …

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 …

bonds. Our main finding is that when reduction of debt is optimal, the sovereign should remain passive in the long-term bond … these bonds. The only active margin is the short-term bond market, which involves partial roll over of such debt. Any active … deleveraging process. We also show that there exist a set of Pareto improving debt restructurings in which maturities are shortened …

distinct samples: 1979-2010, focusing on credit events in emerging markets, and 1920-1939, documenting the official debt …We take a first pass at quantifying the magnitudes of debt relief achieved through default and restructuring in two …); sovereign credit ratings; debt servicing burdens relative to GDP, fiscal revenues, and exports; as well as the level of …