We study the sustainability of public debt in a closed production economy where a benevolent government chooses fiscal … policies, including haircuts on its outstanding debt, in a discretionary manner. Government bonds are held by domestic agents … equilibrium where public debt amounts to a sizeable fraction of output in steady state and is nevertheless fully serviced by the …

This paper proposes a quantitative theory of the interaction between private and public debt in an open economy …. Excessive private debt increases the frequency of financial crises. During such crises the government provides fiscal bailouts … financed with risky public debt. This response may cause a sovereign debt crisis, which is characterized by a higher …

distance, trade, and finance to the US subprime mortgage and Eurozone debt crisis areas. To understand the causes of the cross …

We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or "haircuts". Our … sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor …, with an average haircut of around 45 percent. The data also reveal that “serial restructurings”, meaning two or more debt …