Imbs, Jean; Rancière, Romain - Department of Economics and Business, Universitat … - 2005
with concessional rates. Thus, while debt relief is likely to improve economic policy (and especially investment) in … level of debt is reached: (i)investment falls precipitously as it should when it becomes optimal to default, (ii) economic … policy deteriorates observably, as it should when debt contracts become unable to elicit effort on the part of the debtor …