Abstract:also contributed. Research assistance was provided by Can T. Demir and David Hicks. In addition, the study drew on materials that had been prepared earlier by other staff of the Exchange and Trade Relations Department, especially Hiroyuki Hino, and by staff in other departments.The present study was completed in October 1983 and reflects developments up to that time. The paper has benefited from comments by staff in other departments of the Fund and by members of the Executive Board. However, opinions expresse… Show more
“…18 In an earlier version ofthis paper (Bulow and Rogoff 1986), we extend the results here to the case of several conflicting lenders. For a discussion of some of the practical issues involved, see Lipson (1981) and Brau and Williams (1983).…”
We present a dynamic model of international lending in which borrowers cannot commit to future repayments and in which debtors can sometimes successfully negotiate partial defaults or "rescheduling agreements." All parties in a debt rescheduling negotiation realize that today's rescheduling agreement may itself have to be renegotiated in the future. Our bargaining-theoretic approach allows us to handle the effects of uncertainty on sovereign debt contracts in a much more satisfactory way than in earlier analyses. The framework is readily extended to analyze the conflicting interests of different lenders and of banks and creditor country taxpayers.
“…18 In an earlier version ofthis paper (Bulow and Rogoff 1986), we extend the results here to the case of several conflicting lenders. For a discussion of some of the practical issues involved, see Lipson (1981) and Brau and Williams (1983).…”
We present a dynamic model of international lending in which borrowers cannot commit to future repayments and in which debtors can sometimes successfully negotiate partial defaults or "rescheduling agreements." All parties in a debt rescheduling negotiation realize that today's rescheduling agreement may itself have to be renegotiated in the future. Our bargaining-theoretic approach allows us to handle the effects of uncertainty on sovereign debt contracts in a much more satisfactory way than in earlier analyses. The framework is readily extended to analyze the conflicting interests of different lenders and of banks and creditor country taxpayers.
“…7. See Brau and Williams (1983], from which all facts and figures cited immediately below are taken.…”
Section: Background To Debt Renegotiationsmentioning
confidence: 99%
“…negotiating separately with each creditor, as well as allowing the restructuring process to be conducted in a timely manner (Brau and Williams [1983]).…”
Section: The Playersmentioning
confidence: 99%
“…Debt renegotiations are also conducted through other multilateral forums such as the OECD and special creditor groups. Regardless of the auspices, however, the framework for the negotiations is essentially the same (Brau and Williams [1983], p. 15).…”
“…Such attitudes are not only factually false but could obstruct the search for real and durablesolutions to the problem. Even though the debt crisis has attracted much attention in recent years, most of the analysis of the crisis has focused on the methods used to finance the rapid rate of increase in external debt (Nowzad and Williams 1981;Brau and Williams 1983). There have been few studies that have attempted to explore the motives for debt accumulation exclusive of the obvious need to finance current account deficits resulting from oil price shocks.…”
Section: Fndopenous Sour Ces Oft He Debt Crisismentioning
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.