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State-contingent debt instruments for sovereigns: A balanced view

State-contingent debt instruments for sovereigns: A balanced view

The theoretical benefits of state-contingent debt instruments for sovereigns – such as GDP-linked and extendible bonds – have been advocated by academics for several decades, but only recently have the practical constraints and considerations been explored in detail. This column summarises this more recent work, highlighting key findings on instrument design and on broader market development prospects. […]