IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v27y1995i2p363-77.html
   My bibliography  Save this article

Rescheduling of Sovereign Debt: Forgiveness, Precommitment, and New Money

Author

Listed:
  • Boot, Arnoud W A
  • Kanatas, George

Abstract

The authors analyze debt renegotiation between a lender and a sovereign borrower. A sovereign, endowed with tradable and nontradable goods technologies and debt outstanding, may have the incentive to shift production to nontradable goods if lenders are able to seize foreign assets generated by the sale of tradables. The authors study an integrated rescheduling 'package' involving debt forgiveness, new money, and sovereign precommitment of production, and show that it Pareto-dominates pure debt relief. With asymmetric information between lender and sovereign, precommitment possibly becomes an even more important feature of the renegotiated agreement. Copyright 1995 by Ohio State University Press.

Suggested Citation

  • Boot, Arnoud W A & Kanatas, George, 1995. "Rescheduling of Sovereign Debt: Forgiveness, Precommitment, and New Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 363-377, May.
    • Handle: RePEc:mcb:jmoncb:v:27:y:1995:i:2:p:363-77
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-2879%28199505%2927%3A2%3C363%3AROSDFP%3E2.0.CO%3B2-M&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cao, Qingqing & Minetti, Raoul & Olivero, Maria, 2018. "No Pain, No Gain. Multinational Banks in the Business Cycle," School of Economics Working Paper Series 2018-6, LeBow College of Business, Drexel University.
    2. Raoul Minetti & Matteo Iacoviello, 2010. "Foreign Lenders in Emerging Economies," 2010 Meeting Papers 1050, Society for Economic Dynamics.
    3. Bowe, M. & Dean, J.W., 1997. "Has the Market Solved the Sovereign-Debt Crisis?," Princeton Studies in International Economics 83, International Economics Section, Departement of Economics Princeton University,.
    4. Qingqing Cao, 2018. "No Pain, No Gain. Multinational Banks in the Business Cycle," 2018 Meeting Papers 1059, Society for Economic Dynamics.
    5. Michael WESTPHALEN, 2002. "Valuation of Sovereign Debt with Strategic Defaulting and Rescheduling," FAME Research Paper Series rp43, International Center for Financial Asset Management and Engineering.
    6. Leo Ferraris & Raoul Minetti, 2013. "Foreign Banks and the Dual Effect of Financial Liberalization," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(7), pages 1301-1333, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:27:y:1995:i:2:p:363-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.