Sudden stops, time inconsistency, and the duration of sovereign debt /

We study the sovereign debt duration chosen by the government in the context of a standard model of sovereign default. The government balances off increasing the duration of its debt to mitigate rollover risk and lowering duration to mitigate the debt dilution problem. We present two main results. F...

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Detalles Bibliográficos
Autor principal: Hatchondo, Juan Carlos
Otros Autores: Martinez, Leonardo
Formato: Revista
Lenguaje:English
Publicado: Washington, D.C. : International Monetary Fund, 2013.
Colección:IMF Working Papers; Working Paper ; No. 2013/174
Acceso en línea:Full text available on IMF
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100 1 |a Hatchondo, Juan Carlos. 
245 1 0 |a Sudden stops, time inconsistency, and the duration of sovereign debt /  |c Juan Carlos Hatchondo, Leonardo Martinez. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2013. 
300 |a 1 online resource (17 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a We study the sovereign debt duration chosen by the government in the context of a standard model of sovereign default. The government balances off increasing the duration of its debt to mitigate rollover risk and lowering duration to mitigate the debt dilution problem. We present two main results. First, when the government decides the debt duration on a sequential basis, sudden stop risk increases the average duration by 1 year. Second, we illustrate the time inconsistency problem in the choice of sovereign debt duration: governments would like to commit to a duration that is 1.7 years shorter than the one they choose when decisions are made sequentially. 
538 |a Mode of access: Internet 
700 1 |a Martinez, Leonardo. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2013/174 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2013/174/001.2013.issue-174-en.xml  |z IMF e-Library