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This paper extends the sovereign default model described in Arellano (2008) by including both domestic and foreign debts. The government issues debt and can either inflate away its domestic debt or default on its external component. Under a discretionary policy, the existence of domestic debt...
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Who has access to cheaper forms of borrowing: AAA-rated US corporations or developing countries? In contrast to all expectations, data from the World Bank suggests that the average spread on all forms of borrowing by developing countries is smaller than for top-rated US corporate bonds. Part of...
Persistent link: https://www.econbiz.de/10014076661
The maturity structure of debt can have financial and real consequences. Short-term debt exposes borrowers to rollover … crises. Moreover, debt maturity can have an impact on the ability of firms to undertake long-term productive investments and … maturity and to characterize differences across countries …
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This study quantitatively investigates the currency composition of sovereign debt in the presence of two types of limited enforcement frictions arising from a government's monetary and debt policy: strategic currency debasement and default on sovereign debt. Local currency debt obligations are...
Persistent link: https://www.econbiz.de/10012917595
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This study quantitatively investigates the currency composition of sovereign debt in the presence of two types of limited enforcement frictions arising from a government's monetary and debt policy: strategic currency debasement and default on sovereign debt. Local currency debt obligations are...
Persistent link: https://www.econbiz.de/10012453049
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