Debt Relief

Aydin Hayri ()

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: I develop a model of secondary market pricing of sovereign debt when the creditors can reduce the debt. The sovereign obtains a stochastic revenue flow from the external sector and have a constant debt flow obligation. Default is costly for both the sovereign and the creditors and the possibility to reduce debt creates a surplus. The creditors can capture this surplus only if they can continuously adjust the debt flow.

Keywords: PRICING; DEBT; ECONOMIC MODELS (search for similar items in EconPapers)
JEL-codes: E44 F33 F34 G15 G18 (search for similar items in EconPapers)
Pages: 40 pages
Date: 1996
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Citations: View citations in EconPapers (1)

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https://warwick.ac.uk/fac/soc/economics/research/w ... 95-1998/twerp459.pdf

Related works:
Journal Article: Debt relief (2000)
Working Paper: Debt Relief (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:459

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