Working Papers
Working Papers
In the context of debt restructuring processes, the involvement of third parties in renegotiations is frequent. This paper analyzes the participation of such third parties. I construct a comprehensive sovereign debt dataset that encompasses IMF involvement in restructuring processes from 1970 until 2014, covering a total of 189 cases across 71 countries. The findings from this analysis reveal that restructurings within an IMF program present larger haircuts for the sovereign and quicker returns to credit markets. This paper develops a small open economy model that incorporates the possibility of third-party-mediated agreements during the negotiation process with lenders. The model captures the high average debt service-to-output ratio and elevated spreads observed in Argentina. The model also accounts for other cyclical patterns observed within the country.
This paper examines the relationship between the currency composition and bondholder composition of sovereign debt, focusing on the government's incentives to issue debt denominated in local currency (LC) or foreign currency (FC). We introduce a framework that analyzes the trade-offs governments face when domestic and foreign demand for bonds respond differently to policy changes. The main result is that the government considers the effect on bondholder composition when choosing the currency of its debt. Domestic investors' demand for LC bonds is higher due to the insurance they provide against distortionary taxes.
This paper studies how loan structure shapes housing and default outcomes for lower-income households in the manufactured housing market. Manufactured homes are the largest source of unsubsidized affordable housing in the United States, but financing depends on land tenure. Households without land typically rely on chattel loans, which feature higher interest rates, shorter maturities, and lower loan-to-value limits than traditional mortgages. I document empirical patterns that highlight key frictions in manufactured housing finance. To interpret these patterns, I develop a dynamic model of housing choice with income risk, borrowing constraints, and default. The model is used to study how differences in loan terms shape homeownership decisions and default behavior.