The Simple Analytics of Debt-Equity Swaps
Recent attempts to resolve the international debt crisis have lead some countries to engage in debt-equity swaps. This paper explores conditions under which such transactions are beneficial to the debtor, as well as the creditors. It identifies a market failure that may prevent the emergence of mutually beneficial swaps and analyzes the effects of swaps on the investment level in the debtor country. Copyright 1989 by American Economic Association.
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Volume (Year): 79 (1989)
Issue (Month): 3 (June)
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References listed on IDEAS
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.:
- Merton, Robert C., 1973.
"On the pricing of corporate debt: the risk structure of interest rates,"
684-73., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Merton, Robert C, 1974. "On the Pricing of Corporate Debt: The Risk Structure of Interest Rates," Journal of Finance, American Finance Association, vol. 29(2), pages 449-70, May.
- Michael P. Dooley, 1988. "Buy-Backs and Market Valuation of External Debt," IMF Staff Papers, Palgrave Macmillan, vol. 35(2), pages 215-229, June.
- Jeremy I. Bulow & Kenneth Rogoff, 1987.
"A Constant Recontracting Model of Sovereign Debt,"
NBER Working Papers
2088, National Bureau of Economic Research, Inc.
- Jeremy A.Rogoff Bulow & Kenneth, 1986. "A Constant Recontracting Model of Sovereign Debt," University of Chicago - George G. Stigler Center for Study of Economy and State 43, Chicago - Center for Study of Economy and State.
- Bulow, Jeremy & Rogoff, Kenneth S., 1989. "A Constant Recontracting Model of Sovereign Debt," Scholarly Articles 12491028, Harvard University Department of Economics.
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