Debt Maturity and the International Financial Architecture

34 Pages Posted: 15 Feb 2006

See all articles by Olivier Jeanne

Olivier Jeanne

International Monetary Fund (IMF) - Research Department; Ecole Nationale des Ponts et Chaussees (ENPC); Centre for Economic Policy Research (CEPR)

Date Written: July 2004

Abstract

This paper presents a theory of the maturity of international sovereign debt and derives its implications for the reform of the international financial architecture. It presents a general equilibrium model in which the need to roll over external debt disciplines the policies of debtor countries but makes them vulnerable to unwarranted debt crises owing to bad shocks. The paper presents a welfare analysis of several measures that have been discussed in recent debates, such as the adoption of renegotiation-friendly clauses in debt contracts and the establishment of an international bankruptcy regime for sovereigns.

Keywords: Short-term debt, sovereign debt, international financial architecture, collective action clause, international bankruptcy court

JEL Classification: F32, F33, F34

Suggested Citation

Jeanne, Olivier, Debt Maturity and the International Financial Architecture (July 2004). IMF Working Paper, Vol. , pp. 1-34, 2004. Available at SSRN: https://ssrn.com/abstract=878962

Olivier Jeanne (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

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Ecole Nationale des Ponts et Chaussees (ENPC) ( email )

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75007 Paris
France
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+33 1 44 58 28 80 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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