Growth-Indexed Bonds in Emerging Markets: a Quantitative Approach

Andre Faria ()

No 847, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: In the aftermath of sovereign defaults and financial crises in the 1990s, there have been calls for the widespread use by sovereigns of equity-like financial instruments, in particular, of GDP-indexed bonds. This paper calibrates a general equilibrium model with endogenous default to a typical emerging market economy and evaluates whether the existence of a (partially) GDP-indexed bond, as proposed in the literature, is quantitatively important in what concerns spreads, debt to GDP ratios, and the likelihood of default

Keywords: Sovereign debt; GDP-indexed bonds; Spreads; Emerging markets; Default (search for similar items in EconPapers)
JEL-codes: D83 E43 F34 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:847

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