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| Guinnane, Timothy W.. |
| The 1953 London Debt Agreement settled Germanys debts from the period between the two world wars, and allowed the country to re-establish its role in international capital markets. The Agreement wrote-down the overall debt by about 50 percent and gave the debtors a much longer period to repay. One interesting clause in the Agreement allowed Germany to postpone some payments until such time as re-unification. The Agreement reflects a subtle and responsible understanding of the problems associated with the reparations and debt crises of the 1920s and 1930s, as well as fears about the moral hazard problems that would arise with making any part of the Agreement contingent on events Germany could influence. Recent advocates of third-world debt relief have held... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Germany; London Debt Agreement; Sovereign debt; Debt overhang; HIPC initiative; Financial Economics; N24; F34. |
| Ano: 2004 |
URL: http://purl.umn.edu/28387 |
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| Menzies, Gordon Douglas. |
| A creditor can balance debt recovery and humanitarian goals within an optimal contract framework. The approach ties together two strands of literature that assume either creditor self-interest (Krugman 1988) or benevolence (Addison and Murshed 2003). A reservation utility for the debtor serves as a metric for creditor benevolence. The optimal hyper-incentive contract recognizes that the attainment of health, education, peace and the appeasement of foreign creditors may be conflicting goals. Forgiving debt to motivate paying creditors may therefore have the unintended effect of reducing effort devoted to winning a civil war. For a given reservation utility for the debtor, aid directly targeted towards ending a civil war is a substitute for debt forgiveness. |
| Tipo: Journal Article |
Palavras-chave: Debt overhang; Debt forgiveness; Optimal contracts; Civil war; Exports; Financial Economics; F34; F35. |
| Ano: 2006 |
URL: http://purl.umn.edu/50148 |
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