A Constant Recontracting Model Of Sovereign Debt

Jeremy Bulow and Kenneth Rogoff

No 292692, SSRI Workshop Series from University of Wisconsin-Madison, Social Systems Research Institute

Abstract: We present a dynamic model of international lending in which borrowers cannot commit to future repayments, and where debtors can sometimes successfully negotiate partial defaults, or "rescheduling agreements~. All parties in a debt rescheduling negotiation realize that today's rescheduling agreement may itself have to be ren-egotiated in the future. Our bargaining-theoretic approach allows us to handle the effects ~f uncertainty on sovereign debt contracts in a much more satisfactory way than in earlier analyses. The framework is readily extended to analyze the conflicting interests of different lenders, and of banks and creditor-country taxpayers.

Keywords: Research; Methods/; Statistical; Methods (search for similar items in EconPapers)
Pages: 30
Date: 1988-11
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: A Constant Recontracting Model of Sovereign Debt (1989)
Working Paper: A Constant Recontracting Model of Sovereign Debt (1989)
Working Paper: A Constant Recontracting Model of Sovereign Debt (1986)
Working Paper: A Constant Recontracting Model of Sovereign Debt (1986)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwssri:292692

DOI: 10.22004/ag.econ.292692

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