Debt Dilution and Sovereign Default Risk
测量债务稀释对主权违约风险的影响，并研究可缓解该影响的债务契约。基于西班牙数据校准模型，发现债务稀释解释了78%的违约风险，消除稀释可延长最优债务期限近2年并带来福利收益。
We measure the effects of debt dilution on sovereign default risk and study debt covenants that could mitigate these effects. We calibrate a baseline model with endogenous debt duration and default risk (in which debt can be diluted) using data from Spain. We find that debt dilution accounts for 78 percent of the default risk in the baseline economy and that eliminating dilution increases the optimal duration of sovereign debt by almost 2 years. Eliminating dilution also increases consumption volatility but still produces welfare gains. The debt covenants we study could help enforcing fiscal rules.