We develop a sovereign debt model with offcial and private creditors where default risk depends on both the level and … presence of long-term debt overhang, the availability of offcial funds increases the probability of default on existing debt …, although default does not trigger exclusion from private credit markets. These findings help shed light on joint default and …

benchmark model of sovereign default and direct creditor sanctions by Obstfeld and Rogoff (1996). In their model it is in the … enhances the credibility of the country's promise to repay and prevents default altogether. We incorporate two key features of …

default induced redistribution and costs due to income losses in the wake of a default. Their choice of short- versus long …- term debt affects default and rollover decisions by subsequent policy makers. The equilibrium maturity structure is shaped …, output low, or a cross default more likely. These predictions are consistent with empirical evidence. …

We apply the Diebold-Yilmaz connectedness index methodology on sovereign credit default swaps (SCDSs) to estimate the …