Debt Seniority and Sovereign Debt Crises is popular PDF and ePub book, written by Mr.Anil Ari in 2018-05-09, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Debt Seniority and Sovereign Debt Crises can be Read Online from any device for your convenience.
Debt Seniority and Sovereign Debt Crises Book PDF Summary
Is the seniority structure of sovereign debt neutral for a government's decision between defaulting and raising surpluses? In this paper, we address this question using a model of debt crises where a discretionary government endogenously chooses distortionary taxation and whether to apply an optimal haircut to bondholders. We show that when the size of senior tranches is small, a version of the Modigliani-Miller theorem holds: tranching just redistributes government revenues from junior to senior bondholders, while taxes and government borrowing costs remain unchanged. However, as senior tranches become sufficiently large, default costs on senior debt transpire into a stronger commitment to repay not only the senior tranche, but also the junior one. We show that there is a lower threshold for senior bonds above which tranching can eliminate default on both junior and senior debt, and an upper threshold beyond which the government defaults also on senior debt.
Detail Book of Debt Seniority and Sovereign Debt Crises PDF
- Author : Mr.Anil Ari
- Release : 09 May 2018
- Publisher : International Monetary Fund
- ISBN : 9781484356210
- Genre : Business & Economics
- Total Page : 43 pages
- Language : English
- PDF File Size : 17,9 Mb
If you're still pondering over how to secure a PDF or EPUB version of the book Debt Seniority and Sovereign Debt Crises by Mr.Anil Ari, don't worry! All you have to do is click the 'Get Book' buttons below to kick off your Download or Read Online journey. Just a friendly reminder: we don't upload or host the files ourselves.