We study how language affects private debt renegotiation. We predict that stronger future time reference (FTR) languages alter the importance of renegotiation risk by lowering the perceived value of loan renegotiation. We test this hypothesis on a sample of 6.500 loans issued to European firms...

The emergency financial act introduced by President Park Chung-Hee of Korea in 1972 was a controversial policy that violated the free market principles by implementing substantial deduction of private debt. This interventionist measure, while pioneering, was based on authoritarianism and...