This paper focuses on the scope for stabilizing Latin American economies to repatriate capital for the financing of long-term investments and economic recovery in the region. In particular, a simple two-period investment model is developed to show that a government seeking capital repatriation...

This paper displays and discusses historical data on sovereign debt prices for two Latin American countries and provides a signalling framework to account for the following phenomena: (a) prices for old (defaulted) and newly-issued debts were the same, but such prices diverge and rise sharply...

This paper explains why a debtor country may be eager to spend foreign exchange reserves on the retirement of its cross-border obligations at market prices. A simple two-period framework shows that such spending can be profitable to both the debtor countries and their foreign creditors, and...