Willingness to pay and the sovereign debt contract

This paper uses a contract theory model to argue that covenants ruling debt renegotiations are important to assure the sovereign willingness to pay. The model includes the following features: first, collective action clauses, exit consents, aggregation provisions and pari passu clauses play an important role in the post default “game” of negotiations and coalitions. These covenants are represented in reduced form by the endogenous probability of refinancing a defaulted sovereign debt. Second, the model has “endogenous bad luck” because the unfavorable state of nature where default occurs depends on the level of indebtedness, which is itself an endogenous variable. Third, “vultures”, contrary to conventional wisdom, tend to improve the access of emerging economies to capital markets because they might help to rule out strategic defaults. And fourth, under special assumptions the model is able to analyze the possibility of post default discrimination between domestic and foreign bondholders.debt, default, negotiation, vultures, Shapley-values

Determinants of the development of corporate bond markets in Argentina: One size does not fit all

Conventional theory leads to expect bonds to be a financing vehicle for large firms because of economies of scale and contracting costs. We find both in our econometric evidence for firms quoted on Latin American stock exchanges, and in our survey results for Argentina, that size of assets is a robust determinant of the use of bond finance. This result, together with the fact that there are few firms that are large in terms of market value, can help understand why Argentina, as well as Latin America, has small bond markets in terms of the ratio of the stock of bonds to GDP. Since firm value represents the present value of the cash flows against which the firm borrows, the outstanding stock of corporate bonds is as small as the size of Argentine firms.debt structure, leverage, short term debt, corporate bonds, firm size, firm value

El Modelo Presa-Predador y el Ciclo Populista

Para caracterizar un Orden Social se suele distinguir al Institucionalismo del Populismo. El primero estudia la construcción de un marco normativo para el orden social en base a instituciones como la Constitución, la División de Poderes, el Federalismo, Derechos Humanos o la Democracia. Para el Populismo muchas de estas instituciones son parte del status quo que pueden constituirse en obstáculo para la construcción de un poder hegemónico orientado a mejorar el orden social existente. El poder hegemónico se logra articulando un antagonismo entre el “pueblo” y los “otros” o entre “amigos” y “enemigos”. La implementación del populismo puede dar lugar a un ciclo económico, y existen episodios históricos de populismos que han sido registrados empíricamente en el sector ganadero. En este trabajo utilizo el modelo Presa-Predador (amigo-enemigo) para ilustrar la dinámica de un típico ciclo ganadero consecuencia de una articulación populista en búsqueda de un poder hegemónico.

Loan and bond finance in Argentina, 1985-2005

Loan and bond finance during 1985-2005 can be divided into three sub-periods. After the 1982 debt crisis, which mainly involved domestic and foreign bank loans to both the corporate and government sectors, there was practically no credit. This situation of lack of credit persisted until the domestic economy was stabilized in 1991 with the Convertibility Plan, and foreign debt renegotiation was completed in 1993 with the Brady Plan. Loan finance recovered to unprecedented levels since the 1950s, and bond finance became for the first time an important financing vehicle for both the national government and large firms in the corporate sector. Credit came to a sudden stop in 2001, with widespread default on both corporate and government bonds. The 2001 debt crisis was not followed by runaway domestic inflation, and by 2005 Argentina was able to return to foreign capital markets.bank loans, sovereign bonds, provincial bonds, central bank bonds, corporate bonds, pension funds, yields, liquidity

Pediatric Hand Surgery Training in Nicaragua: A Sustainable Model of Surgical Education in a Resource-Poor Environment.

Recent reports have demonstrated that nearly two-thirds of the world's population do not have access to adequate surgical care, a burden that is borne disproportionately by residents of resource-poor countries. Although the reasons for limited access to surgical care are complex and multi-factorial, among the most substantial barriers is the lack of trained surgical providers. This is particularly true in surgical subspecialties that focus on life-improving, rather than life-saving, treatments, such as pediatric hand and upper extremity surgery, which manages such conditions as congenital malformations, trauma and post-traumatic deformities including burns, and neuromuscular conditions (brachial plexus birth palsy, spinal cord injury, and cerebral palsy). Many models of providing surgical care in resource-limited environments have been described and implemented, but few result in sustainable models of health-care delivery. We present our experience developing a pediatric hand and upper extremity surgery training program in Nicaragua, a resource-limited nation, that grew out of a collaboration of American and Nicaraguan orthopedic surgeons. We compare this experience to that of surgeons undergoing subspecialty training in pediatric upper limb surgery in the US, highlighting the similarities and differences of these training programs. Finally, we assess the results of this training program and identify areas for further growth and development