Torres, Leonardo Barros; Paczos, Wojtek; Shakhnov, Kirill - 2024
We present a theory of determinants of sovereign debt stability on foreign and domestic markets. Besides the two … traditional factors - debt size and output contractions, we highlight the role of the third factor: distortionary tax, which … on the trade-off between domestic and foreign debt stability. The paper explains why outright defaults in domestic debt …