Sovereign Debt Puzzles

Patrick Bolton, Mitu Gulati and Ugo Panizza
Additional contact information
Patrick Bolton: Imperial College, London
Mitu Gulati: University of Virginia Law School

No 27-2022, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: We review the state of the sovereign debt literature and point out that the canonical model of sovereign debt cannot be easily reconciled with several facts about sovereign debt pricing and servicing. We identify and classify twenty puzzles. Some are well known and documented, others are less so and are sometimes based on anecdotal evidence. We classify these puzzles into three categories- puzzles about how sovereigns issue debt; puzzles about the pricing of sovereign debt; and puzzles about sovereign default and the working out of defaults. We conclude by suggesting possible avenues for new research aimed at reconciling theory with what we observe in the real world.

Keywords: Sovereign Debt; Sovereign Default; Public Debt (search for similar items in EconPapers)
JEL-codes: F30 F34 G15 K12 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2022-12-17
New Economics Papers: this item is included in nep-opm
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Related works:
Journal Article: Sovereign Debt Puzzles (2023)
Working Paper: Sovereign Debt Puzzles (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp27-2022

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