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Meyer, Josefin; Reinhart, Carmen M.; Trebesch, Christoph - 2019

to compensate for risk. Real ex-post returns averaged 7% annually across two centuries, including default episodes, major … and with the degree of credit risk in this market, as measured by historical default and recovery rates. Based on our …

Persistent link: https://www.econbiz.de/10012263139

Waterloo: a Godsend for French Public Finances?

Oosterlinck, Kim; Ureche-Rangau, Loredana; Vaslin, … - 2013

Following Waterloo, managing French public finances represented a daunting task. Defeated France had lost a substantial part of its population and territory. The country was partially occupied and France was to pay huge amounts as reparations to the victors. Furthermore, France's reputation had...

Persistent link: https://www.econbiz.de/10012669391

Hidden defaults

Horn, Sebastian; Reinhart, Carmen M.; Trebesch, Christoph - 2022

China's lending boom to developing countries is morphing into defaults and debt distress. Given the secrecy surrounding China's loans, also the associated defaults remain 'hidden', as missed payments and restructuring details are not disclosed. We construct an encompassing dataset of sovereign...

Persistent link: https://www.econbiz.de/10012822350

Enough potential repudiation: Economic and legal aspects of sovereign debt in the pandemic era

Gelpern, Anna; Panizza, Ugo - 2022

This paper surveys recent economic and legal literature on sovereign debt in light of the COVID-19 shock. Most of the core theoretical contributions we review across the two disciplines hinge on immunity, and the sovereign borrower's consequent inability to commit to repay foreign creditors, as...

Persistent link: https://www.econbiz.de/10013432968

Sovereign Borrowing, Financial Assistance and Debt Repudiation

Kirsch, Florian; Rühmkorf, Ronald - 2013

financial assistance has counteracting effects on the default incentives of governments. On the one hand, financial assistance … accumulate higher debt levels. To assess the overall effect of financial assistance on the probability of default we construct a … quantitative model of endogenous credit structure and sovereign default that allows for self-fulfilling expectations of default …

Persistent link: https://www.econbiz.de/10010312972

IMF programs and borrowing costs: Does size matter?

Chahine, Salim; Panizza, Ugo; Suedekum, Guilherme - 2024

This paper studies whether IMF programs and their size affect borrowing costs by comparing the coupon of bonds issued around an IMF arrangement. By comparing bonds issued immediately before the inset of the program with bonds issued immediately after the program, we show that, on average, the...

Persistent link: https://www.econbiz.de/10014540043

Sovereign debt issuance and selective default

Paczos, Wojtek; Shakhnov, Kirill - 2024

default mostly selectively. We propose a theory to rationalize these observations. A government chooses the optimal … less costly than raising taxes, but it is subject to default risk due to the government's limited commitment. A … quantitative, calibrated model with two shocks and two debts replicates well debt-to-GDP ratios, default frequencies, cyclical …

Persistent link: https://www.econbiz.de/10014581761

Domestic and foreign sovereign debt stability

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 hinders the government's ability to freely raise revenues....

Persistent link: https://www.econbiz.de/10014581816

Default-risky Sovereign Debt

Wiggers, Andreas - 2002

. I analyze the value of a default-risky sovereign bond in a setting in which foreign trade is reduced in case the country …

Persistent link: https://www.econbiz.de/10010263080

Why has Japan's massive government debt not wreaked havoc (yet)?

Horioka, Charles Yuji; Nomoto, Takaaki; … - 2013

In this paper, we present data on trends over time in government debt financing in Japan since 2010 with emphasis on the importance of foreign holders and speculate about the determinants of those trends. We find that Japanese government securities were held primarily by domestic holders until...

Persistent link: https://www.econbiz.de/10010332404