We develop a sovereign default model with debt renegotiation in which interest-rate shocks affect default incentives … the 1982 Mexican default, which followed a large increase in US interest rates. Our novel renegotiation mechanism is key …

. We find that equilibrium complicit renegotiation-proof policies are supported by net cross-country wealth transfers from …

We characterize the optimal renegotiation-proof contract in a dynamic Principal-Agent model in which the type of the … renegotiation-proof even if types are highly correlated. The marginal benefit of having some pooling of types in the first period is …

SBC syndrome as a commitment problem. We show that the two features of SBC in centralized economies ex post renegotiation …