Research

Working Papers

Private Debt Flows During Sovereign Default Episodes

Abstract

In this paper, I examine private debt flows during sovereign default episodes. Using default datasets from Asonuma and Trebesch (2016), Reinhart (2009), along with Private New Commitment data from the World Bank’s International Debt Statistics, I document two empirical patterns: 1) countries were not fully cut off from private markets during default episodes, and 2) they borrowed more at the start of the episode than at the end of the episode. To explain these, I introduce a one-period debt model with limited commitment and two private markets with sequential access. I show that the existence of a second market results in welfare loss by reducing the costs of default.

Research in Progress

Wasteonomics: Recyclable Waste Trade with Pilar Barros and Ekin Ulusoy

Financial Integration of the Private Sector and Sovereign Debt