Sovereign Debt, Default and Renegotiation with Endogenous Financial Contracting

摘要: This paper reconsiders the theory of sovereign debt, default and renegotiation in a setting that motivates conventional bond finance. A tax-smoothing model government borrowing on international financial markets is used to analyze self-enforcing equilibrium private information economy. The main contribution show how debtor can be motivate implementation through issuance bonds are renegotiated only adverse states after debt has reached sufficiently high level. qualitative features this correspond favorably empirical experience default. also considers role nominal public issues for achieving contingent repayments with unanticipated inflation. It shows does not lead inflation outside already outstanding debt.