01780cas a2200253 a 4500 AALejournalIMF013770 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475586176 1018-5941 BD-DhAAL BD-DhAAL Hatchondo, Juan Carlos. Sudden stops, time inconsistency, and the duration of sovereign debt / Juan Carlos Hatchondo, Leonardo Martinez. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (17 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We study the sovereign debt duration chosen by the government in the context of a standard model of sovereign default. The government balances off increasing the duration of its debt to mitigate rollover risk and lowering duration to mitigate the debt dilution problem. We present two main results. First, when the government decides the debt duration on a sequential basis, sudden stop risk increases the average duration by 1 year. Second, we illustrate the time inconsistency problem in the choice of sovereign debt duration: governments would like to commit to a duration that is 1.7 years shorter than the one they choose when decisions are made sequentially. Mode of access: Internet Martinez, Leonardo. IMF Working Papers; Working Paper ; No. 2013/174 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/174/001.2013.issue-174-en.xml IMF e-Library