First-best debt relief

Gordon Douglas Menzies

doi:10.1016/j.econlet.2003.07.009

First-best debt relief

Gordon Douglas Menzies^*

^*Corresponding author for this work

Indonesia Project

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

The rationale for debt relief (J. Dev. Econ. 29 (1988) 253) is second best. In a first-best ontract, a debtor who clears a (partly forgiven) debt receives an additional payment from the creditor, called a hyper-incentive .

Original language	English
Pages (from-to)	301-306
Number of pages	6
Journal	Economics Letters
Volume	82
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2003.07.009
Publication status	Published - Mar 2004

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title = "First-best debt relief",

abstract = "The rationale for debt relief (J. Dev. Econ. 29 (1988) 253) is second best. In a first-best ontract, a debtor who clears a (partly forgiven) debt receives an additional payment from the creditor, called a hyper-incentive .",

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KW - Debt overhang

KW - Hyper-incentive contract

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First-best debt relief

Abstract

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