Sovereign debt puzzles
File(s)ARFE Sovereign Debt Puzzles.pdf (269.99 KB)
Published version
Author(s)
Bolton, P
Gulati, M
Panizza, U
Type
Journal Article
Abstract
We review the state of the sovereign debt literature and point out that the canonical model of sovereign debt cannot be easily reconciled with several facts about sovereign debt pricing and servicing. We identify and classify more than 20 puzzles. Some are well-known and documented, others are less so and are sometimes based on anecdotal evidence. We classify these puzzles into three categories: puzzles about how sovereigns issue debt; puzzles about the pricing of sovereign debt; and puzzles about sovereign default and the working out of defaults. We conclude by suggesting possible avenues for new research aimed at reconciling theory with what we observe in the real world.
Date Issued
2023-11
Online Publication Date
2024-07-09T13:32:25Z
Date Acceptance
2023-11-01
ISSN
1941-1367
Publisher
Annual Reviews
Start Page
239
End Page
263
Journal / Book Title
Annual Review of Financial Economics
Volume
15
Copyright Statement
Copyright © 2023 by the author(s).
This work is licensed under a Creative Commons Attribution 4.0 International License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. See credit lines of images or other third-party material in this article for license information
This work is licensed under a Creative Commons Attribution 4.0 International License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. See credit lines of images or other third-party material in this article for license information
License URI
Identifier
https://www.annualreviews.org/content/journals/10.1146/annurev-financial-111620-030025
Publication Status
Published
Date Publish Online
2023-11