Bulow, Jeremy; Rogoff, Kenneth - In: The Quarterly Journal of Economics 106 (1991) 4, pp. 1219-35
Troubled debtor countries do not gain by repurchasing external bank debt at market discount, even if a buyback would stimulate investment by relieving debt overhang. The reason is that buybacks allow creditors to reap more than 100 percent of any efficiency gains that might result from increased...