Non-defaultable debt and sovereign risk /
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| Author / Creator: | Hatchondo, Juan Carlos, author. |
|---|---|
| Imprint: | Washington, D.C. : International Monetary Fund, IMF Institute for Capacity Development, 2014. |
| Description: | 1 online resource (25 pages) |
| Language: | English |
| Series: | IMF working paper ; WP14/198 IMF working paper ; WP14/198. |
| Subject: | |
| Format: | E-Resource Book |
| URL for this record: | http://pi.lib.uchicago.edu/1001/cat/bib/12504138 |
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| 100 | 1 | |a Hatchondo, Juan Carlos, |e author. |0 http://id.loc.gov/authorities/names/n2005080131 | |
| 245 | 1 | 0 | |a Non-defaultable debt and sovereign risk / |c prepared by Juan Carlos Hatchondo, Leonardo Martinez, Yasin Kursat Onder. |
| 260 | |a Washington, D.C. : |b International Monetary Fund, IMF Institute for Capacity Development, |c 2014. | ||
| 300 | |a 1 online resource (25 pages) | ||
| 336 | |a text |b txt |2 rdacontent | ||
| 337 | |a computer |b c |2 rdamedia | ||
| 338 | |a online resource |b cr |2 rdacarrier | ||
| 490 | 1 | |a IMF working paper ; |v WP14/198 | |
| 500 | |a "October 2014." | ||
| 520 | |a "The authors quantify gains from introducing non-defaultable debt as a limited additional financing option into a model of equilibrium sovereign risk. They find that, for an initial (defaultable) sovereign debt level equal to 66 percent of trend aggregate income and a sovereign spread of 2.9 percent, introducing the possibility of issuing non-defaultable debt for up to 10 percent of aggregate income reduces immediately the spread to 1.4 percent, and implies a welfare gain equivalent to a permanent consumption increase of 0.9 percent. The spread reduction would be only 0.1 (0.2) percentage points higher if the government uses nondefaultable debt to buy back (finance a 'voluntary' debt exchange for) previously issued defaultable debt. Without restrictions to defaultable debt issuances in the future, the spread reduction achieved by the introduction of non-defaultable debt is short lived. They also show that allowing governments in default to increase non-defaultable debt is damaging at the time non-defaultable debt is introduced and inconsequential in the medium term. These findings shed light on different aspects of proposals to introduce common euro-area sovereign bonds that could be virtually non-defaultable."--Abstract. | ||
| 505 | 0 | |a Cover; Contents; I. Introduction; II. Model; A. Recursive formulation; B. Recursive equilibrium; III. Calibration; IV. Results; Tables; 1. Parameter values; A. Effects of introducing non-defaultable bonds; 2. Effects of introducing non-defaultable bonds; Figures; 1. Debt after the introduction of non-defaultable bonds; 2. Default decision with and without non-defaultable bonds; B. Debt buybacks; 3. Effects of introducing non-defaultable bonds with a defaultable-debt buyback; C. "Voluntary" debt exchanges; 3. Debt after the introduction of non-defaultable bonds through a buyback. | |
| 505 | 8 | |a D. Long-run effect of non-defaultable on default risk4. Effects of introducing non-defaultable bonds with a "voluntary" debt exchange; 4. Sovereign spread after the introduction of non-defaultable bonds; E. Voluntary debt exchanges with a limit for defaultable debt; F. Issuances of non-defaultable bonds during defaults; 5. Effects of introducing non-defaultable bonds with a limit for defaultable debt; V. Conclusions; References. | |
| 650 | 0 | |a Debts, Public |x Econometric models. | |
| 650 | 0 | |a Default (Finance) |x Econometric models. | |
| 650 | 6 | |a Dettes publiques |x Modèles économétriques. | |
| 650 | 6 | |a Défaillance (Finances) |x Modèles économétriques. | |
| 650 | 7 | |a Debts, Public |x Econometric models. |2 fast |0 (OCoLC)fst00888859 | |
| 650 | 7 | |a Default (Finance) |x Econometric models. |2 fast |0 (OCoLC)fst00889574 | |
| 655 | 0 | |a Electronic books. | |
| 655 | 4 | |a Electronic books. | |
| 700 | 1 | |a Martínez, Leonardo, |e author. |0 http://id.loc.gov/authorities/names/n90634658 | |
| 700 | 1 | |a Onder, Yasin Kursat, |e author. |0 http://id.loc.gov/authorities/names/no2013143074 | |
| 710 | 2 | |a International Monetary Fund. |0 http://id.loc.gov/authorities/names/n81052755 | |
| 710 | 2 | |a International Monetary Fund. |b Institute for Capacity Development, |e issuing body. |0 http://id.loc.gov/authorities/names/no2012075144 | |
| 830 | 0 | |a IMF working paper ; |v WP14/198. |0 http://id.loc.gov/authorities/names/no89010263 | |
| 856 | 4 | 0 | |u http://elibrary.imf.org/view/journals/001/2014/198/001.2014.issue-198-en.xml |y INTERNATIONAL MONETARY FUND |
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