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The Long and the Short of It : Sovereign Debt Crises and Debt Maturity

Fernández, Raquel - 2014

We present a simple model of sovereign debt crises in which a country chooses its optimal mix of short and long … incentives to engage in debt dilution, the country must issue short-term debt. This exposes it to roll-over crises and … maturity in the event of crises, and show that both necessarily improve ex ante welfare if they do not decrease expected …

Persistent link: https://www.econbiz.de/10012457880

Competition and Intervention in Sovereign Debt Markets

Paasche, Bernhard - 2001

We investigate markets for defaultable sovereign debt in which even though there are many identical lenders and symmetric information (including no hidden actions), perfect competition does not obtain. When a private lender allows a sovereign country to increase its level of indebtedness, that...

Persistent link: https://www.econbiz.de/10012470036

Sovereign Debt

Eaton, Jonathan - 1995

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...

Persistent link: https://www.econbiz.de/10012473755

Linkages across Sovereign Debt Markets

Arellano, Cristina - 2013

We develop a multicountry model in which default in one country triggers default in other countries. Countries are linked to one another by borrowing from and renegotiating with common lenders with concave payoffs. A foreign default increases incentives to default at home because it makes new...

Persistent link: https://www.econbiz.de/10012459113

Credit Ratings and the Pricing of Sovereign Debt during the Euro Crisis

Aizenman, Joshua - 2013

This paper investigates the impact of credit rating changes on the sovereign spreads in the European Union and investigates the macro and financial factors that account for the time varying effects of a given credit rating change. We find that changes of ratings are informative, economically...

Persistent link: https://www.econbiz.de/10012459536

Sovereign Debt Standstills

Hatchondo, Juan C. - 2020

As a response to economic crises triggered by COVID-19, sovereign debt standstill proposals emphasize debt payment …

Persistent link: https://www.econbiz.de/10012482510

Sovereign Debt and Repudiation : The Emerging-Market Debt Crisis in the U.S. States, 1839-1843

Wallis, John Joseph - 2004

In 1841 and 1842, eight states and the Territory of Florida defaulted on their sovereign debts. Traditional histories of the default crisis have stressed the causal role of the depression that began with the Panic of 1837, unexpected revenue shortfalls from canal and bank investments as a result...

Persistent link: https://www.econbiz.de/10012467937

Why Has Japan's Massive Government Debt Not Wreaked Havoc (Yet)?

Horioka, Charles Y. - 2013

In this paper, we present data on trends over time in government debt financing in Japan since 2010 with emphasis on the importance of foreign holders and speculate about the determinants of those trends. We find that Japanese government securities were held primarily by domestic holders until...

Persistent link: https://www.econbiz.de/10012459066

Asymmetric Information and Sovereign Debt : Theory Meets Mexican Data

Cole, Harold L.; Neuhann, Daniel; Ordoñez, Guillermo - National Bureau of Economic Research - 2021

Using a novel data set containing all bids by all bidders for Mexican government bonds from 2001 to 2017, we demonstrate that asymmetric information about default risk is a key determinant of primary market bond yields. Empirically, large bidders do not pay more for bonds than the average bidder...

Persistent link: https://www.econbiz.de/10012482676

The Demand for Treasury Debt

Krishnamurthy, Arvind - 2007

We show that the US Debt/GDP ratio is negatively correlated with the spread between corporate bond yields and Treasury bond yields. The result holds even when controlling for the default risk on corporate bonds. We argue that the corporate bond spread reflects a convenience yield that investors...

Persistent link: https://www.econbiz.de/10012465775

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