Infrastructure, returns to scale and sovereign debt

Cern Karayalcin, Kathryn McCollister, Mitra Devashish

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This paper explores the nexus between the issue of sovereign debt and investment in infrastructure, emphasizing the case of economies of scale. The focus is on debt contracts that are incentive compatible. It is shown that public and private financial institutions may need to lend amounts above some threshold to force the borrowing sovereign to take full advantage of any economies of scale that may be present. Low levels of lending may or may not result in default. Sufficiently high amounts of lending may be needed to ensure repayment and may prove to be mutually beneficial.

Original languageEnglish
Pages (from-to)267-278
Number of pages12
JournalJournal of International Trade and Economic Development
Volume11
Issue number3
DOIs
StatePublished - Sep 1 2002

Fingerprint

returns to scale
economy of scale
debt
lending
indebtedness
infrastructure
economy
incentive
contract
public

Keywords

  • Infrastructure
  • Returns to scale
  • Sovereign debt

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

Cite this

Infrastructure, returns to scale and sovereign debt. / Karayalcin, Cern; McCollister, Kathryn; Devashish, Mitra.

In: Journal of International Trade and Economic Development, Vol. 11, No. 3, 01.09.2002, p. 267-278.

Research output: Contribution to journalArticle

@article{c57781b3220e4c66b9c8f9a2d22f205c,
title = "Infrastructure, returns to scale and sovereign debt",
abstract = "This paper explores the nexus between the issue of sovereign debt and investment in infrastructure, emphasizing the case of economies of scale. The focus is on debt contracts that are incentive compatible. It is shown that public and private financial institutions may need to lend amounts above some threshold to force the borrowing sovereign to take full advantage of any economies of scale that may be present. Low levels of lending may or may not result in default. Sufficiently high amounts of lending may be needed to ensure repayment and may prove to be mutually beneficial.",
keywords = "Infrastructure, Returns to scale, Sovereign debt",
author = "Cern Karayalcin and Kathryn McCollister and Mitra Devashish",
year = "2002",
month = "9",
day = "1",
doi = "10.1080/09638190210151400",
language = "English",
volume = "11",
pages = "267--278",
journal = "Journal of International Trade and Economic Development",
issn = "0963-8199",
publisher = "Routledge",
number = "3",

}

TY - JOUR

T1 - Infrastructure, returns to scale and sovereign debt

AU - Karayalcin, Cern

AU - McCollister, Kathryn

AU - Devashish, Mitra

PY - 2002/9/1

Y1 - 2002/9/1

N2 - This paper explores the nexus between the issue of sovereign debt and investment in infrastructure, emphasizing the case of economies of scale. The focus is on debt contracts that are incentive compatible. It is shown that public and private financial institutions may need to lend amounts above some threshold to force the borrowing sovereign to take full advantage of any economies of scale that may be present. Low levels of lending may or may not result in default. Sufficiently high amounts of lending may be needed to ensure repayment and may prove to be mutually beneficial.

AB - This paper explores the nexus between the issue of sovereign debt and investment in infrastructure, emphasizing the case of economies of scale. The focus is on debt contracts that are incentive compatible. It is shown that public and private financial institutions may need to lend amounts above some threshold to force the borrowing sovereign to take full advantage of any economies of scale that may be present. Low levels of lending may or may not result in default. Sufficiently high amounts of lending may be needed to ensure repayment and may prove to be mutually beneficial.

KW - Infrastructure

KW - Returns to scale

KW - Sovereign debt

UR - http://www.scopus.com/inward/record.url?scp=33745270390&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33745270390&partnerID=8YFLogxK

U2 - 10.1080/09638190210151400

DO - 10.1080/09638190210151400

M3 - Article

AN - SCOPUS:33745270390

VL - 11

SP - 267

EP - 278

JO - Journal of International Trade and Economic Development

JF - Journal of International Trade and Economic Development

SN - 0963-8199

IS - 3

ER -