Martin Brooke, Rhys Mendes, Alex Pienkowski, Eric Santor.
Recent Eurozone events have changed the perception that sovereign debt is a problem of emerging-market economies. This column highlights some major deficiencies of the current framework, and proposes two new and complementary types of state-contingent debt contracts. The first – sovereign cocos – are designed to tackle liquidity crises. The second – GDP-linked bonds – help prevent solvency crises.
Πηγή: Voxeu