Work

Sovereign Debt: A Review

Year: 2013

Type: report

Abstract: In this chapter, we use a benchmark limited-commitment model to explore key issues in the economics of sovereign debt.After highlighting conceptual issues that distinguish sovereign debt as well as reviewing a number of empirical facts, we use the model to discuss debt overhang, risk sharing, and capital flows in an environment of limited enforcement.We also discuss recent progress on default and renegotiation; self-fulfilling debt crises; and incomplete markets and their quantitative implications.We conclude with a brief assessment of the current state of the literature and highlight some directions for future research.

Source: National Bureau of Economic Research

DOI: 10.3386/w19388

Authors: Mark Aguiar, Manuel Amador

Institutions: National Bureau of Economic Research, Princeton University, Stanford University

Language: English

Topic: Global Financial Crisis and Policies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

Funder: National Science Foundation