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IMF paper on debt dilution
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An IMF paper published in March says the risk associated with sovereign debt dilution can be mitigated by government commitment.
Juan Carlos Hatchondo, Leonardo Martinez and Cesar Sosa Padilla, the paper's authors, study the effects of the sovereign debt dilution problem caused by the government's lack of commitment to avoid decreasing the value of debt issued in the past by issuing new debt.
The results show that even without commitment to future repayment policies and without contingency of
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