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Asonuma, Tamon - 2014

Emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters even with the same debt-to-GDP ratio. This paper explains this stylized fact within a dynamic stochastic general equilibrium framework by...

Persistent link: https://www.econbiz.de/10013056385

Sovereign Defaults, External Debt and Real Exchange Rate Dynamics

Asonuma, Tamon - 2014

Emerging countries experience real exchange rate depreciations around defaults. In this paper, we examine this observed pattern empirically and through the lens of a dynamic stochastic general equilibrium model. The theoretical model explicitly incorporates bond issuances in local and foreign...

Persistent link: https://www.econbiz.de/10013056392

Do countries default in bad times? : the role of alternative detrending techniques

Panizza, Ugo - 2022

Quantitative models of sovereign debt predict that countries should default during deep recessions. However, empirical research on sovereign debt has found a surprisingly large share of "good times" defaults (i.e., defaults that happen when GDP is above trend). Existing evidence also indicates...

Persistent link: https://www.econbiz.de/10013173175

Sovereign Cocos

Hatchondo, Juan; Martinez, Leonardo; Önder, Yasin Kürşat - 2022

We study a model of equilibrium sovereign default in which the government issues cocos (contingent convertible bonds) that stipulate a suspension of debt payments when the government faces liquidity shocks in the form of an increase of the bondholders' risk aversion. We find that in spite of...

Persistent link: https://www.econbiz.de/10013289445

Sovereign Debt Crises and Credit to the Private Sector

Arteta, Carlos Oscar; Hale, Galina - 2007

We argue that, through its effect on aggregate demand and country risk premia, sovereign debt restructuring can adversely affect the private sector's access to foreign capital markets. Using fixed effect analysis, we estimate that sovereign debt rescheduling episodes are indeed systematically...

Persistent link: https://www.econbiz.de/10014056743

Target Losses in Case of a Euro Break-Up

Sinn, Hans-Werner - 2012

Evaluation of the financial costs of a Eurozone breakup depends critically on the interpretation of TARGET balances. While it has been argued that TARGET claims in the Eurozone can be written off without incurring any losses on the claimants as the value of fiat money is independent of the...

Persistent link: https://www.econbiz.de/10013098046

Managing financial crises in emerging market economies - experience with the involvement of private sector creditors

Thimann, Christian; Wölfinger, Regine; Bracke, Thierry; … - 2005

providing for early dialogue between a debtor and its creditors also facilitates private sector involvement. Finally, the IMF … plays a key role in crisis situations, as accurate and timely diagnosis by the IMF helps identify at an early stage the need …

Persistent link: https://www.econbiz.de/10011606184

Managing financial crises in emerging market economies - experience with the involvement of private sector creditors

Thimann, Christian; Wölfinger, Regine; Bracke, Thierry; … - European Central Bank - 2005

Persistent link: https://www.econbiz.de/10005530664

The effect of IMF lending on the probability of sovereign debt crises

Jorra, Markus - 2010

This paper explores empirically how the adoption of IMF programs affects sovereign risk over the medium term. We find … that IMF programs significantly increase the probability of subsequent sovereign defaults by approximately 1.5 to 2 … sovereign defaults and program participation simultaneously. Furthermore, IMF programs turn out to be especially detrimental to …

Persistent link: https://www.econbiz.de/10008695546

Ramifications of debt restructuring on the euro area : the example of large European economies' exposure to Greece

Belke, Ansgar; Dreger, Christian - 2011

The Greek government budget situation plays a central role in the debt crisis in the euro area. The debt to GDP ratio is above 150 percent, while the deficit to GDP ratio exceeds 10 percent. To re-establish the Maastricht criteria, respectively, strong consolidation measures need to be...

Persistent link: https://www.econbiz.de/10009580303