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Deficits, Debts and Defaults - Past, Present and Future

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  • Peter Sinclair
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    Abstract

    This paper explores the issue of whether rates of interest should and do tend to exceed rates of growth, a key determinant of debt sustainability. It goes on to consider the argument for debt renegotiation in circumstances where sustainability is in grave doubt.

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    File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/11-20.pdf
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    Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 11-20.

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    Length: 17 pages
    Date of creation: Dec 2011
    Date of revision:
    Handle: RePEc:bir:birmec:11-20
    Contact details of provider: Postal: Edgbaston, Birmingham, B15 2TT
    Web page: http://www.economics.bham.ac.uk

    More information through EDIRC

    Keywords: debt sustainability; debt renegotiation; default;

    Find related papers by JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

    This paper has been announced in the following NEP Reports:

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    1. Fender, John & Sinclair, Peter, 2000. "A Theory of Credit Ceilings in a Model of Debt and Renegotiation," Bulletin of Economic Research, Wiley Blackwell, vol. 52(3), pages 235-56, July.
    2. Martin Uribe & Vivian Yue, 2004. "Country spreads and emerging countries: who drives whom?," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
    3. Stiglitz, Joseph E & Weiss, Andrew, 1983. "Incentive Effects of Terminations: Applications to the Credit and Labor Markets," American Economic Review, American Economic Association, vol. 73(5), pages 912-27, December.
    4. Fernandez-Ruiz, Jorge, 2000. "Debt Buybacks, Debt Reduction, and Debt Rescheduling under Asymmetric Information," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(1), pages 13-27, February.
    5. Nicola Gennaioli & Alberto Martin & Stefano Rossi, 2014. "Sovereign Default, Domestic Banks, and Financial Institutions," Journal of Finance, American Finance Association, vol. 69(2), pages 819-866, 04.
    6. Eaton, Jonathan & Gersovitz, Mark, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Wiley Blackwell, vol. 48(2), pages 289-309, April.
    7. Hui Chen, 2010. "Macroeconomic Conditions and the Puzzles of Credit Spreads and Capital Structure," NBER Working Papers 16151, National Bureau of Economic Research, Inc.
    8. Udaibir S. Das & Michael G. Papaioannou & Christoph Trebesch, 2010. "Sovereign Default Risk and Private Sector Access to Capital in Emerging Markets," IMF Working Papers 10/10, International Monetary Fund.
    9. Uribe, Martín, 2002. "A fiscal theory of sovereign risk," Working Paper Series 0187, European Central Bank.
    10. Elhanan Helpman, 1988. "The Simple Analytics of Debt-Equity Swaps," NBER Working Papers 2771, National Bureau of Economic Research, Inc.
    11. Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
    12. Leonardo Martinez & Juan Carlos Hatchondo & Cesar Sosa Padilla, 2011. "Debt Dilution and Sovereign Default Risk," IMF Working Papers 11/70, International Monetary Fund.
    13. Dean P. Foster & H. Peyton Young, 2010. "Gaming Performance Fees by Portfolio Managers," The Quarterly Journal of Economics, MIT Press, vol. 125(4), pages 1435-1458, November.
    14. Andrew K. Rose, 2001. "One reason countries pay their debts: renegotiation and international trade," Staff Reports 142, Federal Reserve Bank of New York.
    15. Sachs, Jeffrey D, 1990. "A Strategy for Efficient Debt Reduction," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 19-29, Winter.
    16. Igor Livshits & James MacGee & Michele Tertilt, 2005. "Consumer Bankruptcy: A Fresh Start," Discussion Papers 04-011, Stanford Institute for Economic Policy Research.
    17. John H. Cochrane, 2010. "Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic," NBER Working Papers 16087, National Bureau of Economic Research, Inc.
    18. Oved Yosha & Bent E. Sorensen & Ariell Reshef & Sebnem Kalemli-Ozcan, 2007. "Why Does Capital Flow to Rich States?," 2007 Meeting Papers 828, Society for Economic Dynamics.
    19. John Fender & Peter Sinclair, 2006. "On Risk Aversion and Investment: A Theoretical Approach," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(4), pages 601-626, December.
    20. Enrique G. Mendoza & Vivian Z. Yue, 2008. "A Solution to the Disconnect between Country Risk and Business Cycle Theories," NBER Working Papers 13861, National Bureau of Economic Research, Inc.
    21. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973, March.
    22. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
    23. Eli M Remolona & Michela Scatigna & Eliza Wu, 2007. "Interpreting sovereign spreads," BIS Quarterly Review, Bank for International Settlements, March.
    24. Polito, Vito & Wickens, Michael R., 2005. "Measuring Fiscal Sustainability," CEPR Discussion Papers 5312, C.E.P.R. Discussion Papers.
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