Project Contingent Repudiation Risk in the Model of North-South Lending

Gurdgiev, Constantin T. (2003) Project Contingent Repudiation Risk in the Model of North-South Lending. UNSPECIFIED. (Unpublished)

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Present research proposes the extension of the Gertler-Rogoff-Lane model of international lending under the risk of repudiation with moral hazard to encompass the possibility of the project contingency in the repudiation risk itself. By linking the level of repudiation risk to the size of the project we show that investment projects undertaken can be biased in a direction favouring larger projects. Alternatively, we show that smaller investors are required in the marketplace, under certain conditions, to provide greater guarantees or higher collateral in order to obtain funds needed for investment

Item Type: Other
Keywords: Moral Hazard, Investment , Repudiation Risk, state Contigency, Project Contigency
Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
Item ID: 112
Depositing User: Ms Sandra Doherty
Date Deposited: 12 Sep 2003
Refereed: No

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