Sovereign Debt

Mark A. Aguiar, Manuel Amador

Research output: Chapter in Book/Report/Conference proceedingChapter

47 Scopus citations

Abstract

In this chapter, we use a benchmark limited-commitment model to explore key issues in the economics of sovereign debt. After highlighting conceptual issues that distinguish sovereign debt as well as reviewing a number of empirical facts, we use the model to discuss debt overhang, risk-sharing, and capital flows in an environment of limited enforcement. We also discuss recent progress on default and renegotiation; self-fulfilling debt crises; and incomplete markets and their quantitative implications. We conclude with a brief assessment of the current state of the literature and highlight some directions for future research.

Original languageEnglish (US)
Title of host publicationHandbook of International Economics
PublisherElsevier B.V.
Pages647-687
Number of pages41
DOIs
StatePublished - Jan 1 2014

Publication series

NameHandbook of International Economics
Volume4
ISSN (Print)1573-4404

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Political Science and International Relations

Keywords

  • Debt overhang
  • Default
  • Sovereign debt

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  • Cite this

    Aguiar, M. A., & Amador, M. (2014). Sovereign Debt. In Handbook of International Economics (pp. 647-687). (Handbook of International Economics; Vol. 4). Elsevier B.V.. https://doi.org/10.1016/B978-0-444-54314-1.00011-2