Waiting for a haircut? A bargaining perspective on sovereign debt restructuring

Marcus Miller, Sayantan Ghosal and Kannika Thampanishvong

No 11710, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Recent investigation of sovereign debt negotiations finds that prompt, market-friendly ‘reprofiling’ often fails to achieve sustainability; but serious debt restructuring typically involves delay. We develop an incomplete information bargaining model to account for this, highlighting economic recovery and sustainability considerations as complementary reasons for delay. Some recent settlements are discussed, along with some policy implications of excessive profiling.

Keywords: Debt restructuring; Delay; Growth; Sustainability; Asymmetric information (search for similar items in EconPapers)
JEL-codes: C78 F34 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (2)

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Journal Article: Waiting for a haircut? A bargaining perspective on sovereign debt restructuring (2019)
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