The maturity of government debt varies across countries and time. We document that in times of high inflation the maturity of debt is shorter and the level of debt is lower. We develop a model of the maturity of debt based on government credibility. We show that credible government who can...

show that financial development can rationalize the difference in growth rates between firms of different sizes across countries.

The recent financial crisis has been accompanied by severe contractions in economic activity and credit as well as unprecedented levels of uncertainty. This project constructs a quantitative model with default risk where an increase in dispersion leads firms to contract the size of their...

financial crisis. This paper develops a model of world trade and financial frictions to gain insights into the mechanisms by which a deterioration in financial conditions interact with countries' exports and imports. We extend the international business cycle model to a model of a continuum of...

In this paper, we use data from developing countries to argue that sovereign defaults are often caused by fiscal pressures generated by large-scale domestic defaults. We argue that these systemic domestic defaults are caused by shocks best interpreted as being non-fundamental. We construct a...

This paper studies linkages across sovereign debt markets when debt is unenforceable and countries choose to default and renegotiate. In the model countries are linked to one another by borrowing from a common lender. Borrowing from a common lender connects borrowing rates across countries as...

We build a dynamic model of international borrowing and default that can rationalize the dynamics of spread and the maturity composition of debt in the data. The spread curve reflects the dynamics of the endogenous probability of default that is persistent yet mean reverting because of the...

Researchers have documented that in the recent financial crisis the large decline in economic activity and credit has been accompanied by a large increase in the dispersion of growth rates across firms. We build a quantitative general equilibrium model in which financial frictions interact with...

In this paper we produce a theory of partial default applicable to sovereign debt. The theory uses Markovian equilibria and the notion that circulating unpaid coupons of any given country courtail its productive capabilities. As a consequence no issues of equilibrium selection appear in the...