The choice of sovereign-debt maturity in countries at risk of default represents a complex set of competing forces. The tradeoffs reflect the underlying frictions present in international sovereign-debt markets. The primary frictions are the lack of state contingency in debt contracts and the inability ...

Business cycles in emerging markets are characterized by high levels of volatility in income, investment, and net exports. Consumption is more volatile than income, and net exports are highly countercyclical (see Aguiar and Gopinath, 2007). Furthermore, the interest rates faced by these economies are ...