We present a novel and tractable model of long-term sovereign debt. We make two sets of contributions. First, on the substantive side, using Argentina as a test case we show that unlike one-period debt models, our model of long-term sovereign debt is capable of accounting for the average spread,...

After 1982 the international investment position of the United States dramatically shifted from one of sizable net creditor to much more sizable net debtor. As the U.S. deficit on current international transactions soared to record levels during the mid-1980s, some observers perceived a grave...