Do the secondary markets believe in life after debt?
AbstractUsing panel data econometric techniques to examine the case for external debt relief, this report explores the relations between measures of creditworthiness and debt discounts on the secondary markets. It finds, however, that secondary market values tend to reflect past difficulties, not anticipate future ones - so they can't be used to build a case for debt relief. The secondary markets, still in an early evolutionary stage, are quite"thin"and thus unable to exploit efficiently and quickly all available information on creditworthiness.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 252.
Date of creation: 31 Aug 1989
Date of revision:
Environmental Economics&Policies; Strategic Debt Management; Economic Theory&Research; Banks&Banking Reform; Financial Intermediation;
Other versions of this item:
- Vassilis A. Hajivassiliou, 1989. "Do the Secondary Markets Believe in Life After Debt?," Cowles Foundation Discussion Papers 911, Cowles Foundation for Research in Economics, Yale University.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
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