This dissertation is composed of two papers. In the first paper, we draw a distinction between the "optimal debt" and the "debt capacity" of a sovereign nation. It is shown that for a sovereign nation, its debt capacity is at most equal to its optimal debt. The existence and the type of equilibrium that prevails in the international capital market is also discussed. The last part of the first paper demonstrates that with an international organization such as the International Monetary Fund (IMF), the borrowing nations are better off and the lenders are no worse off. / Evaluating the risk of lending to a sovereign nation is the subject discussed in the second paper. Based upon the contingent claim pricing framework, a simulation model is created and employed to study the relationship between the risk of lending to a sovereign nation and the parameters specified in the model. It is shown that the risk of lending is dependent upon the instantaneous variance rate of change in foreign reserves. This risk of lending is not always positively related to the instantaneous variance rate. The results of the empirical study show that the model can explain reality quite well. Finally, it is argued that raising the interest rate is not an appropriate means to cope with the risk of lending. Instead, lenders rely on the quantity rationing of credit as a means to cope with the risk of sovereign lending. / Source: Dissertation Abstracts International, Volume: 47-08, Section: A, page: 3150. / Thesis (Ph.D.)--The Florida State University, 1986.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_75918 |
| Contributors | PATTAPHONGS, DANAI., Florida State University |
| Source Sets | Florida State University |
| Detected Language | English |
| Type | Text |
| Format | 189 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
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