Debt Relief Measures and the Crumpled Zone Feature in Sovereign Debt Instruments

Covid (and Other) Contingencies We close out 2020 with all-star guests Lee Buchheit, Joyce Chang, and Jeromin Zettelmeyer to discuss contingent debt instruments. Many economists extol the virtues of GDP-linked bonds, but investors are wary. Is caution appropriate? And what about the biggest modern contingency: the risk that COVID-19 will cause more economic harm than expected? Even in normal times, governments often receive less debt relief than they need, leading to multiple rounds of restructuring. We talk about the "COVID codicil" as a potential solution to this problem. Should investors fear or welcome it? Producer: Leanna Doty