TY  - JOUR
AU  - Helpman,Elhanan
TI  - The Simple Analytics of Debt-Equity Swaps
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2771
PY  - 1989
Y2  - July 1989
UR  - http://www.nber.org/papers/w2771
L1  - http://www.nber.org/papers/w2771.pdf
N1  - Author contact info:
Elhanan Helpman
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA 02138
Tel: 617-495-4690
Fax: 617-495-7730
E-Mail: ehelpman@harvard.edu
AB  - Recent attempts to resolve the international debt crisis have lead some countries to engage in debt-equity swaps. The paper explores conditions under which such transactions are beneficial to the debtor as well as the creditors. It identifies a market failure that may prevent the emergence of actually beneficial swaps and analyzes the effects of swaps on the investment level in the debtor country. The latter helps to evaluate the contribution of this policy to future difficulties with debt service payments.
ER  -