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The Maturity and Payment Schedule of Sovereign Debt

Bai, Yan - 2015

This paper studies the maturity and stream of payments of sovereign debt. Using Bloomberg bond data for eleven emerging … economies, we document that countries react to crises by issuing debt with shortened maturity but back-load payment schedules …. To account for this pattern, we develop a sovereign default model with an endogenous choice of debt maturity and payment …

Persistent link: https://www.econbiz.de/10012457770

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

Debt Intolerance

Reinhart, Carmen M. - 2003

This paper introduces the concept of debt intolerance,' which manifests itself in the extreme duress many emerging markets experience at debt levels that would seem manageable by advanced country standards. We argue that safe' external debt-to-GNP thresholds for debt intolerant countries are...

Persistent link: https://www.econbiz.de/10012468789

Sovereign Debt Portfolios, Bond Risks, and the Credibility of Monetary Policy

Du, Wenxin - 2016

Nominal debt provides consumption-smoothing benefits if it can be inflated away during recessions. However, we document empirically that countries with more countercyclical inflation, where nominal debt provides better consumption-smoothing, issue more foreign-currency debt. We propose that...

Persistent link: https://www.econbiz.de/10012456087

Quantitative Models of Sovereign Debt Crises

Aguiar, Mark - 2016

This chapter is on quantitative models of sovereign debt crises in emerging economies. We interpret debt crises broadly to cover all of the major problems a country can experience while trying to issue new debt, including default, sharp increases in the spread and failed auctions. We examine the...

Persistent link: https://www.econbiz.de/10012456549

Optimal Reserve Management and Sovereign Debt

Alfaro, Laura - 2007

To study the joint decision of holding sovereign debt and reserves, we construct a stochastic dynamic equilibrium model that incorporates willingness-to-pay incentive problems. In this setup, debt and assets are not perfect substitutes, as reserves can be used even after a country has defaulted....

Persistent link: https://www.econbiz.de/10012465438

Individual Versus Aggregate Collateral Constraints and the Overborrowing Syndrome

Uribe, Martín - 2006

This paper compares the equilibrium dynamics of an economy facing an aggregate collateral constraint on external debt to the dynamics of an economy facing a collateral constraint imposed at the level of each individual agent. The aggregate collateral constraint is intended to capture an...

Persistent link: https://www.econbiz.de/10012466408

The Aftermath of Debt Surges

Kose, M. Ayhan; Ohnsorge, Franziska; Reinhart, Carmen M.; … - National Bureau of Economic Research - 2021

Debt in emerging market and developing economies (EMDEs) is at its highest level in half a century. In about nine out of 10 EMDEs, debt is higher now than it was in 2010 and, in half of the EMDEs, debt is more than 30 percentage points of gross domestic product higher. Historically, elevated...

Persistent link: https://www.econbiz.de/10012629486

Debauchery and Original Sin : The Currency Composition of Sovereign Debt

Engel, Charles - 2018

This study quantitatively investigates the currency composition of sovereign debt in the presence of two types of limited enforcement frictions arising from a government's monetary and debt policy: strategic currency debasement and default on sovereign debt. Local currency debt obligations are...

Persistent link: https://www.econbiz.de/10012453049

Debt Redemption and Reserve Accumulation

Alfaro, Laura - 2013

In the past decade, foreign participation in local-currency bond markets in emerging countries has increased dramatically. We revisit sovereign debt sustainability under the assumptions that countries can borrow internationally using their own currencies and accumulate reserves. As opposed to...

Persistent link: https://www.econbiz.de/10012459563