Format:
Online-Ressource (31 p)
ISBN:
9781451869002
Series Statement:
IMF Working Papers
Content:
Delays in debt restructuring negotiations are widely regarded as inefficient. This paper argues that delays can allow the economy to recover from a crisis, make more resources available for debt settlement, and enable the negotiating parties to enjoy a larger ""cake"". Within this context, therefore, delays may be ""beneficial"". This paper explores this idea by constructing a dynamic model of sovereign default in which debt renegotiation is modeled as a stochastic bargaining game based on Merlo and Wilson's (1995) framework. Quantitative analysis shows that this model can generate an average
Note:
Description based upon print version of record
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Contents; I. Introduction; Tables; 1. Cases of Sovereign Debt Restructurings; II. The Model; A. Sovereign Government's Problem; B. Debt Renegotiation Problem; C. International Investors' Problem; III. Equilibrium; IV. Quantitative Analysis; A. Calibration; 2. Model Parameter Values; B. Numerical Results on Equilibrium Properties; 3. Target Statistics and Model Statistics; Figures; 1. Equilibrium Default Probabilities; 2. Equilibrium Propose/Pass Choices of the Borrower and the Lender; 3. Equilibrium Debt Recovery Rates; 4. Proposed Debt Repayments; C. Simulation Results
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5. Ergodic Distribution of the Equilibrium Delay Length4. Business Cycle Statistics from the Model and the Data; V. Determinants of Renegotiation Delay Length; A. Output Process and Equilibrium Delay Length; 5. Delay Lengths under Different Output Processes; B. Other Parameters and Renegotiation Delay Length; 6. Delay Lengths under Different Parameter Values; VI. Conclusion; Appendix; I. Proposition Proof; II. Computation Algorithm; References
Additional Edition:
9781451913538
Additional Edition:
Print version Beneficial Delays in Debt Restructuring Negotiations
Language:
English
Keywords:
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