How does convenience yield interact with sovereign risk and the supply of government bonds? We propose a model of sovereign debt and default in which convenience yield arises because investors are able to pledge government bonds as collateral on financial markets. Convenience yield is dependent...

Acknowledgments -- Introduction / Martin Guzman, Jose Antonio Ocampo, and Joseph E. Stiglitz -- General issues of sovereign debt restructuring -- Fixing sovereign debt restructuring / Martin Guzman and Joseph E. Stiglitz -- Sovereign debt of developing countries : overview of trends and policy...