A main puzzle in the sovereign debt literature is that defaults have only minor effects on subsequent borrowing costs and access to credit. This paper comes to a different conclusion. We construct the first complete database of investor losses (\"haircuts\") in all restructurings with foreign...

Unlike outside investors, controlling groups have the option to trade on inside information, and can exercise it at the expense of the former. In this paper, a simple theoretical model rationalizes the relationship between corporate governance and insider trading decisions through reputational...

The sovereign credit rating is a key determinant of the cost and availability of international financing for an economy. This paper models ratings as a function of expected repayment capacity, derives testable hypotheses, and conducts a statistical analysis based of the ratings awarded by...

The prevailing valuation technique in Emerging Markets adds the country risk to the discount rate in an ad-hoc manner. This practice does not account for the term structure of default risk. The mismatch between the duration of the project being valued and the duration of the measure of country...

This paper proposes a new empirical measure of cooperative versus conflictual crisis resolution following sovereign default and debt distress. The index of government coerciveness is presented as a proxy for excusable versus inexcusable default behaviour and used to evaluate the costs of default...

We show that political booms, measured by the rise in governments' popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging...

Migration contributes to the circulation of goods, knowledge, and ideas. Using community and individual-level data from Moldova, we show that the Emigration episode that started in the late 1990s strongly affected political preferences and electoral outcomes in Moldova during the following...

We show that political booms, measured by the rise in governments’ popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging...