Voluntary Debt Reduction : Incentives and Welfare.
In an economy with a debt overhang, investment depends on expected tax rates. On the other hand, expected tax rates depend on the debt's face value. Therefore investment depends on the face value of debt. I show that this may lead to a positive or negative association between debt and investmen...
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| Format: | Journal |
| Language: | English |
| Published: |
Washington, D.C. :
International Monetary Fund,
1988.
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| Series: | IMF Working Papers; Working Paper ;
No. 1988/084 |
| Online Access: | Full text available on IMF |