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deserve greater attention in debt sustainability analysis. Finally, we compare the theory of fiscal insurance to the debt … expenditure and the book value of the debt. The lack of a more theory-based accounting framework is indeed a major obstacle to …
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We study time-consistent debt policies in a trade-off model of debt in which the firm can freely issue new debt and repurchase existing debt. A debt policy is time-consistent if in any state equityholders prefer to follow it rather than to deviate from it but lose credibility in sustaining debt...
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