Sovereign Debt

Mark A. Aguiar, Manuel Amador

Research output: Chapter in Book/Report/Conference proceedingChapter

55 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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