A Seniority Arrangement for Sovereign Debt
研究了在主权债务合同中加入优先权条款（按放贷顺序偿付）以缓解债务稀释问题，并在量化模型中分析了该条款的正面和规范含义。
A sovereign’s inability to commit to a course of action regarding future borrowing and default behavior makes long-term debt costly (the problem of debt dilution). One mechanism to mitigate this problem is the inclusion of a seniority clause in debt contracts. In the event of default, creditors are to be paid off in the order in which they lent (the “absolute priority” or “first-in-time” rule). In this paper, we propose a modification of the absolute priority rule suited to sovereign debts contracts and analyze its positive and normative implications within a quantitatively realistic model of sovereign debt and default.