Optimal Sovereign Debt Relief and Exclusion with Unobservable Physical Capital (2024)
Journal Article
Marsiliani, L., Renström, T. I., & Yaisawang, N. (2024). Optimal Sovereign Debt Relief and Exclusion with Unobservable Physical Capital. Theoretical Economics Letters, 14(1), 321-349. https://doi.org/10.4236/tel.2024.141018

We investigate the optimum lending arrangements when there is the possibility of partial default, in addition to full default, when physical capital is unobservable. In a model calibrated on Argentina, we find an optimal debt reduction of 39%, and op... Read More about Optimal Sovereign Debt Relief and Exclusion with Unobservable Physical Capital.