Multilateral indexed loans and debt sustainability

Optimal Management of Indexed and Nominal Debt

A tax-smoothing objective is used to assess the optimal composition of public debt with respect to maturity and contingencies. This objective motivates the government to make its debt payouts contingent on the levels of public outlay and the tax base. If these contingencies are present, but asset prices of non-contingent indexed debt are stochastic, then full tax smoothing dictates an optimal m...

The Corporate Choice between Public Debt, Bank Loans, Traditional Private Debt Placements, and 144A Debt Issues

The main purpose of this study is to examine the determinants of the corporate choice between different forms of debt financing. By analyzing the most comprehensive sample of U.S. corporate debt issues to date, I find that firms that issue 144A debt have significantly lower credit quality and higher information asymmetry than firms that issue traditional non-bank private debt. Further, the stud...

GAO-02-698T Developing Countries: Switching Some Multilateral Loans to Grants Would Lessen Poor Country Debt Burdens

I am pleased to be here today to discuss the impact that switching some loans to grants would have on poor countries debt burdens. In July 2001, President Bush proposed that the World Bank and other development banks replace 50 percent of future loans to the worlds poorest countries with grants. A goal of this proposal was to relieve poor countries long-term debt burdens. The presidents grants ...

Collateral, liquidity and debt sustainability

We study the sustainability of public debt in a closed production economy where a benevolent government chooses fiscal policies, including haircuts on its outstanding debt, in a discretionary manner. Government bonds are held by domestic agents to smooth consumption over time and because they provide collateral and liquidity services. We characterize a recursive equilibrium where public debt am...

Sustainability of Public Debt