Equilibria in the sovereign debt market of the province of Buenos Aires: an approximation using a Logit model (1995–2022)
DOI:
https://doi.org/10.59339/de.v64i245.798Keywords:
Public Debt; Default; Province of Buenos AiresAbstract
We analyze the sovereign debt market of the Province of Buenos Aires using a model that accounts for the existence of multiple equilibria. The probability of default is estimated through a Logit model with data for the period 1995–2022, and the analysis focuses on the years 2016–2019, when the opening of the capital account and access to international markets facilitated a process of resource acquisition. The results show that the provincial borrowing capacity was more limited than what authorities assumed. The high dollarization of the debt and the concentration of short-term maturities increased financial stress in the years preceding the 2021 restructuring. The evidence suggests that official sustainability criteria overestimated the actual repayment capacity.
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