How is a developing country affected by its government's ability to borrow in international markets? We examine the dynamics of a country's growth, consumption, and sovereign debt, assuming that the government's objective is to maximize short-term, typically wasteful, expenditures. Sovereign...

Consumer debts in the United States can effectively live (and grow) forever: most statutes of limitations do not extinguish them; they can morph into relatives' obligations after the debtor's death; and they sometimes rise from the grave even after they have been paid. All the while, interest...

Environment of international trade is shaped by both economic and social factors. Legal framework may influence the trade by both those channels simultaneously by changing contract terms directly and by influencing conduct of parties to a transaction. This is the case of jurisdictional...

This paper investigates whether the effect of bank lending shocks has changed over time using a sign-restriction Vector Autoregression approach. To the extent to which the effect of bank lending shocks depends critically on firms' ability to access alternative sources of financing, the rapid...

Debt can increase economic growth as it allows the households and firms to increase consumption and investment. However, high reliance on debt adversely affects economy as it can cause debt-deflationary recession, balance sheet recession, cyclical fluctuations in economy and decrease in...

Consumer debts in the United States can effectively live (and grow) forever: most statutes of limitations do not extinguish them; they can morph into relatives' obligations after the debtor's death; and they sometimes rise from the grave even after they have been paid. All the while, interest...

Governments in emerging countries are increasingly issuing bonds in local currencies and foreign holdings of these bonds have been growing significantly. Motivated by these novel facts, we build a model where local (foreign) investors specialize in local (foreign) currency bonds. After paying a...