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 …

State-contingent debt instruments such as GDP-linked warrants have garnered attention as
a potential tool to help debt-stressed economies smooth repayments over business cycles …

We develop a closed economy model to study the interactions among sovereign risk premia,
fiscal limits, and fiscal policy. The fiscal limits, which measure the government's ability to …

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 quantify gains from introducing limited financing through non-defaultable debt into a
model of equilibrium sovereign risk. For an initial sovereign spread of 4.2%, introducing the …

Using a quantitative sovereign default model, we characterize constrained efficient
borrowing by a Ramsey government that commits to income-history-contingent borrowing …

Whether governments should issue GDP-indexed sovereign debt continues to be the
subject of policy debates. This article contributes to this debate by studying the effects of …

This paper explores the effect of macroprudential policies on bank balance sheets,
sovereign default risk, aggregate fluctuations and welfare. We build a model of defaultable …

We construct a dynamic equilibrium model with contingent service and adverse selection to
quantitatively study sovereign debt. In the model, benefits of defaulting are tempered by …

In this lecture, I revisit whether sovereign debt markets have delivered on their promise of
fostering growth and enhancing risk sharing in emerging and developing economies. I use …