Recent sovereign defaults in emerging countries are accompanied by interest rate spikes and deep recessions. This paper develops a small open economy model to study default risk and its interaction with output, consumption, and foreign debt. Default probabilities and interest rates depend on incentives for repayment. Default occurs in equilibrium because asset markets are incomplete. The model ...

This study investigates the effect of the external debt burden on economic growth and development of Nigeria .It adopted regression analysis of OLS on secondary data sourced from CBN, Economical and Financial review, Business times, Financial Standard and relevant publication from Nigeria on variable like National Income, Debt Service Payment, External Reserves, Interest rate among others. The ...

This study identifies the correlates of legal financial obligation (LFO) debt repayment among persons sentenced to probation and transferred a specialized collections unit. Using bivariate tests logistic regression, results indicate that starting balance amounts, monthly payment enforcement actions (capias warrant) are strongest influences on likelihood full repayment. These some will struggle ...

We revisit the link between risk of sovereign default and costs. Contrary to prior literature, we show that higher costs may result in probabilities, lower bond prices, fiscal limits are not pinned down by economic fundamentals. Government debt sustainability depends on private investment behavior, which is affected expectations about defaults capital returns. argue this feedback loop gives ris...