Sudden stops, time inconsistency, and the duration of sovereign debt

WP/13/174

Sudden stops, time inconsistency, and the duration of sovereign debt
We study the sovereign debt duration chosen by the government in the context of a standard model of sovereign default. The government balances off increasing the duration of its debt to mitigate rollover risk and lowering duration to mitigate the debt dilution problem. We present two main results. First, when the government decides the debt... READ MORE...

Publication date: July 2013
ISBN 9781475586176
$18.00

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Publication date: July 2013

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Publication date: July 2013

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