Serial Default and Debt Renegotiation

Tamon Asonuma

No 169, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: with the number of past defaults, consistent with empirical observations. The equilibrium of the model also accords with an additional observed fact: a country for which default terms require less than a 100 percent recovery rate tends to pay a higher rate of return (relative to a risk-free rate) on subsequently issued debt than do defaulting countries that agree to a full recovery rate.

Date: 2010
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Working Paper: Serial default and debt renegotiation (2012)
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