The Simple Analytics of Debt-Equity Swaps and Debt Forgiveness

42 Pages Posted: 15 Feb 2006

See all articles by Elhanan Helpman

Elhanan Helpman

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: March 29, 1988

Abstract

This paper is concerned with debt-equity swaps in which foreign residents are a party to the exchange (i.e., it does not deal with flight capital), and with debt forgiveness. The seemingly unrelated issues of debt-equity swaps and debt forgiveness are jointly treated in this study, because debt forgiveness is in fact a special case of debt-equity swaps. Namely, it is a swap in which a positive amount of debt is exchanged for zero equity. For this reason these two problems have many common features.

JEL Classification: 433, 441

Suggested Citation

Helpman, Elhanan, The Simple Analytics of Debt-Equity Swaps and Debt Forgiveness (March 29, 1988). IMF Working Paper No. 88/30. Available at SSRN: https://ssrn.com/abstract=884700

Elhanan Helpman (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-4690 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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