A Theory of Debt Maturity: The Long and Short of Debt Overhang

2012 ◽  
Author(s):  
Douglas W. Diamond ◽  
Zhiguo He
Keyword(s):  
Debt Maturity ◽  
Debt Overhang

Sticky Leverage

2016 ◽  
Vol 106 (12) ◽  
pp. 3800-3828 ◽  
Author(s):  
João Gomes ◽  
Urban Jermann ◽  
Lukas Schmid
Keyword(s):  
Interest Rate ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Debt Maturity ◽  
General Equilibrium Model ◽  
Corporate Debt ◽  
Debt Overhang ◽  
The Real ◽  
Unanticipated Inflation

We develop a tractable general equilibrium model that captures the interplay between nominal long-term corporate debt, inflation, and real aggregates. We show that unanticipated inflation changes the real burden of debt and, more significantly, leads to a debt overhang that distorts future investment and production decisions. For these effects to be both large and very persistent, it is essential that debt maturity exceeds one period. We also show that interest rate rules can help stabilize our economy. (JEL E12, E31, E44, E52, G01, G32, G35)

A Theory of Debt Maturity: The Long and Short of Debt Overhang

2014 ◽  
Vol 69 (2) ◽  
pp. 719-762 ◽  
Author(s):  
DOUGLAS W. DIAMOND ◽  
ZHIGUO HE
Keyword(s):  
Debt Maturity ◽  
Debt Overhang

Leverage Change, Debt Overhang, and Stock Prices

CFA Digest ◽  
2011 ◽  
Vol 41 (3) ◽  
pp. 19-21
Author(s):  
Chenchuramaiah T. Bathala
Keyword(s):  
Stock Prices ◽  
Debt Overhang

Shareholder Advantage and Debt Overhang

2012 ◽  
Author(s):  
Emmanuel Alanis ◽  
Sudheer Chava
Keyword(s):  
Debt Overhang
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