A Delicate Equilibrium: Debt Relief and Default Penalties in an International Context
Author:
Mr. Guillermo Calvo https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mr. Guillermo Calvo in
Current site
Google Scholar Close
Language:
English
Print Publication Date:
15 Mar 1989
Keywords:
BOOK; debt; debtor country; market; loan contract; borrower default; loan repayment; loan market; borrower's investment; Debt relief; Loans; Debt default; Personal income; Income inequality; Global

Abstract

Debt relief and penalties are discussed in connection with sovereign-country loans. The paper focuses on conditions for the existence of penalties that are too low for ensuring Pareto efficiency and shows the possible time inconsistency of optimal debt contracts. A methodology for ascertaining debt relief implicit in international loans is outlined.

Within Same Series

Other IMF Content

Other Publishers Content

  • Collapse
  • Expand
Cover Analytical Issues in Debt
Analytical Issues in Debt
ISBN:
9781557750419
Publication Date:
15 Mar 1989
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781557750419.071
Pages:
427