Sovereign Debt: A Primer
AbstractThe troublesome debts of a number of developing countries have spawned a large literature on why countries borrow, on the extent to which debt contributes to growth, on why countries repay, and on how debt problems should be handled. This article provides a basic introduction to some issues in sovereign debt. First, it presents the basic accounting concepts associated with debt. Second, it treats debt as a component of the intertemporal maximization of a borrower in a competitive loan market facing an intertemporal budget constraint. Third, it introduces debt into recent models of endogenous growth and examines what these models imply about the relationship between debt and growth. Fourth, it discusses issues arising from sovereign risk. Fifth, it examines incentives to repay. Sixth, it reviews the various options available to a creditor facing a debtor unwilling to meet current debt service obligations. Seveth, it examines debt buybacks. Copyright 1993 by Oxford University Press.
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Bibliographic InfoArticle provided by World Bank Group in its journal World Bank Economic Review.
Volume (Year): 7 (1993)
Issue (Month): 2 (May)
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Other versions of this item:
- Jonathan Eaton, 1991. "Sovereign Debt: A Primer," Boston University - Institute for Economic Development 21, Boston University, Institute for Economic Development.
- Eaton, Jonathan, 1992. "Sovereign debt : a primer," Policy Research Working Paper Series 855, The World Bank.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Diwan, Ishac & Demirguc-Kunt, Asli, 1990. "The menu approach to developing country external debt : an analysis of commercial banks'choice behavior," Policy Research Working Paper Series 530, The World Bank.
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NBER Working Papers
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- Kletzer, K.M. & Wright, B.D., 1990. "Sovereign Debt Renegotiation In A Consumption-Smoothing Model," Papers 610, Yale - Economic Growth Center.
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