We revisit the debt overhang question. We first use non-parametric techniques to isolate a panel of countries on the downward sloping section of a debt Laffer curve. In particular, overhang countries are ones where a threshold level of debt is reached in sample, beyond which (initial) debt ends...

In financial and economic policy circles concerned with public debt in developingcountries, a rising debt-GDP ratio is interpreted as a signal of overborrowing, warn-ing of debt defaults if strong fiscal corrections are not adopted in time. This papershows why this interpretation is incorrect by...

The ratios of public debt as a share of GDP of Brazil, Colombia, and Mexico were 12 percentagepoints higher on average during the period 1996-2005 than in the period 1990-1995. CostaRica's debt ratio remained stable but at a high level near 50 percent. Is there reason to beconcerned for the...

We empirically analyse the appropriateness of indexing emerging market sovereign debt to USreal interest rates. We find that policy-induced exogenous increases in US rates raise default riskin emerging market economies, as hypothesised in the theoretical literature. However, we also findevidence...

In recent years, credit risk has played a key role in risk management issues. Practitioners, academics and regulators have been fully involved in the process of developing, studying and analyzing credit risk models in order to find the elements which characterize a sound risk management system.(...)

This paper studies public-debt runs under alternative assumptions on the distribution oftaxes among tax bases, the distribution of debt among classes of taxpayers, and thedistributive preferences of the government. Asymmetries in the distribution of taxes--arising, for example, from income-tax...

The paper presents a comprehensive data set of all bonds issued by the sixteenGerman states (Länder) since 1992. It thus provides a complete picture of acapital market comparable in size to funds raised in the German fixed incomemarket for corporations. The quantitative analysis reveals that...

This paper explores the relationship between the denomination ofpublic debt and the choice of exchange rate regime. Unlike indexeddomestic debt, foreign debt is subject to valuation e¤ects from realexchange rate shocks. In a standard set-up, where a peg functions onlyas a nominal anchor, more...

The theory of seigniorage is surveyed and reviewed. A theoretical model is developedwhich nests optimal tax theory and institutional approaches to fiscal and monetarypolicy...

This paper provides a simple model of the rescheduling of debt following a sovereign default as a bond exchange.