TY  - BOOK
AU  - Froot,Kenneth A.
AU  - Scharfstein,David S.
AU  - Stein,Jeremy C.
ED  - National Bureau of Economic Research.
TI  - LDC Debt: Forgiveness, Indexation, and Investment Incentives 
T2  - NBER working paper series
PY  - 1988///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - March 1988; Hardcopy version available to institutional subscribers
N2  - We compare different indexation schemes in terms of their ability to facilitate forgiveness and reduce the investment disincentives associated with the large LDC debt overhang. Indexing to an endogenous variable (e.g., a country's output) has a negative moral hazard effect on investment, This problem does not arise when payments are linked to an exogenous variable such as commodity prices. Nonetheless, indexing payments to output may be useful when debtors know more about their willingness to invest than lenders. We also reach new conclusions about the desirability of default penalties under asymmetric information
UR  - https://www.nber.org/papers/w2541
UR  - http://dx.doi.org/10.3386/w2541
ER  -