TY  - JOUR
AU  - Eaton,Jonathan
AU  - Fernandez,Raquel
TI  - Sovereign Debt
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5131
PY  - 1995
Y2  - May 1995
UR  - http://www.nber.org/papers/w5131
L1  - http://www.nber.org/papers/w5131.pdf
N1  - Author contact info:
Jonathan Eaton
Department of Economics
Penn State University
608 Kern Graduate Building
University Park, PA 16802-3306
Tel: (814) 865 - 8871
Fax: (814) 863 - 4775
E-Mail: jxe22@psu.edu

Raquel Fernández
Department of Economics
New York University
19 West 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8908
Fax: 212/995-4186
E-Mail: raquel.fernandez@nyu.edu
AB  - We review the literature on sovereign debt.  We organize our survey around three central questions: (1) Why do sovereign debtors ever repay their debts? (2) What burdens, in the form of distortions and inefficiencies, does sovereign debt impose? and (3) How might debt be restructured to reduce these burdens?  In grappling with the first question the literature has pointed to, and argued about, the roles of reputation, punishments, rewards and renegotiation.  In addressing the second the literature has asked whether sovereign debtors tend to borrow too much or too little, and how debt can distort the domestic economy.  Answers to the third question include measures by creditors, by debtors, and by public institutions to reduce debt burdens.
ER  -