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How does physical capital accumulation affect the decision to default in developing small open economies? We find that, conditional on a level of foreign indebtedness, more capital improves the sovereign's ability to meet its obligations, reducing the likelihood of default and the risk premium....
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Migration plays a key role in city finances with every new entrant reducing debt per person and every exit increasing it. We study the interactions between regional borrowing, migration, and default from empirical, theoretical, and quantitative perspectives. Empirically, we document that...
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What is the optimal consumer bankruptcy law? I examine this question in the context of an incomplete markets lifecycle … model with a planner who can choose state-contingent bankruptcy costs. I develop two key theoretical characterizations … filing. Second, it is optimal for the planner to always allow bankruptcy if the household cannot repay or would prefer an …
Persistent link: https://www.econbiz.de/10013047556
How does physical capital accumulation affect the decision to default in developing small open economies? We find that, conditional on a level of foreign indebtedness, more capital improves the sovereign?s ability to meet its obligations, reducing the likelihood of default and the risk premium....
Persistent link: https://www.econbiz.de/10013214921