Secret "Buybacks" of LDC Debt
AbstractWe analyse the buy-back of its debt by an LDC. Contrary to the analyses that were previously done on this subject, we assume that the debtor can hide its transactions behind the veil of a fictitious operator: the banks, we assume, cannot discriminate intra-bank transactions from buy-backs by the debtor itself. With this assumption, the lenders set the price by (rationally) taking account of the country's incentive to repurchase its debt. Will the debtor undertake a buy-back of its debt? The answer is a qualified yes. Large buy-backs will take place. With a continuum of debtors (whose cash constraints are not perfectly known to the banks), the rich debtors will attempt to repurchase as much of their debt as their cash constraint allows them to. This is shown to be Pareto-improving for both the banks and the debtor country.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 91-18.
Length: 24 pages
Date of creation: 1991
Date of revision:
Publication status: Published in Journal of International Economics, 1995, 39, pp. 317-334
debt ; developing countries;
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Rohan Pitchford & Mark L. J. Wright, 2010.
"Holdouts in Sovereign Debt Restructuring: A Theory of Negotiation in a Weak Contractual Environment,"
NBER Working Papers
16632, National Bureau of Economic Research, Inc.
- Rohan Pitchford & Mark L. J. Wright, 2012. "Holdouts in Sovereign Debt Restructuring: A Theory of Negotiation in a Weak Contractual Environment," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 812-837.
- Rohan Pitchford & Mark L. J. Wright, 2008. "Holdouts In Sovereign Debt Restructuring: A Theory Of Negotiation In A Weak Contractual Environment," CAMA Working Papers 2008-37, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Marchesi, S., 2000. "Buybacks of Domestic Debt in Public Debt Management," The Warwick Economics Research Paper Series (TWERPS) 573, University of Warwick, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.