American Economic Review Vol. 79 No. 1 1989
Sovereign Debt: Is to Forgive to Forget?
Abstract
We show that, under fairly general conditions, lending to small countries must be supported by the direct sanctions available to creditors, and cannot be supported by a country's "reputation for repayment." This distinction is critically important for understanding the true underlying structure of sovereign lending contracts, and comparing policy alternatives for dealing with the developing country debt problem.
- Volume
- 79
- Issue
- 1
- Pages
- 43-50
- Sources
- bibtex:phds-export.bib