Debt Maturity and the International Financial Architecture

Author/Editor:

Olivier D Jeanne

Publication Date:

July 1, 2004

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper presents a theory of the maturity of international sovereign debt and derives its implications for the reform of the international financial architecture. It presents a general equilibrium model in which the need to roll over external debt disciplines the policies of debtor countries but makes them vulnerable to unwarranted debt crises owing to bad shocks. The paper presents a welfare analysis of several measures that have been discussed in recent debates, such as the adoption of renegotiation-friendly clauses in debt contracts and the establishment of an international bankruptcy regime for sovereigns.

Series:

Working Paper No. 2004/137

Subject:

Collective action clauses Debt default External debt Financial crises Public debt

English

Publication Date:

July 1, 2004

ISBN/ISSN:

9781451855944/1018-5941

Stock No:

WPIEA1372004

Pages:

33

Please address any questions about this title to publications@imf.org