Debt overhang in developing economies is an issue that must be addressed in order for these economies to grow. A debt burden that is high relative to the economy’s output results in a low credit rating by the rating agencies, which in turn leads to a higher price on further borrowing by the affected countries. Several remedies have been proposed (and used in practice) to resolve the problem of debt overhang. The purpose of this paper is to examine the proposed remedies with an emphasis placed on debt buybacks in the context of the existing models, as well as to attempt to add on to these existing models
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