Credit constraints linking debt to market-determined prices embody a systemic credit
externality that drives a wedge between competitive and constrained socially optimal …

Financial globalization had a rocky start in emerging economies hit by Sudden Stops.
Foreign reserves have grown very rapidly since then, as if those countries were practicing a …

We measure the effects of debt dilution on sovereign default risk and study debt covenants
that could mitigate these effects. We calibrate a baseline model with endogenous debt …

We study fiscal rules using a sovereign default model. A debt-brake (spread-brake) rule
imposes a ceiling on the fiscal deficit when the sovereign debt (spread) is above a threshold …

There has been substantial research on the benefits of accumulating foreign reserves, but
less on the relative merits of how these reserves are accumulated. In this paper we explore …

Emerging market governments hold mixed debt portfolios: They borrow at home and abroad
in both nominal and real terms. This paper incorporates such a mixed debt structure into a …

When he began this book in early 2008, Guillermo Perry argued that developing countries
remained highly vulnerable to external risks such as commodity price declines, capital flow …

We study the pricing, design, and desirability of sovereign state-contingent debt instruments.
Using a sovereign default model with lenders who fear model misspecification, we find that …

This paper analyzes the implications of remittance fluctuations for various macroeconomic
variables and sudden stops. The paper employs a quantitative two-sector model of a small …

This paper assesses how issuance of GDP-linked debt and longer-maturity debt, in
comparison to short-term debt, can help boost fiscal space for a given path of primary …