Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226035
Authors: 
Papadia, Andrea
Schioppa, Claudio A.
Year of Publication: 
2020
Series/Report no.: 
Working Papers of the Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour" 25
Abstract: 
We show how elite capture affects optimal debt repatriations and management of official reserves under capital controls, bridging literature on debt buybacks and secondary markets. The model we provide guides our study of one of history's largest debt repatriations -in 1930s Germany. Authorities kept private repatriations under strict control -avoiding detrimental macroeconomic effects- while allowing discretionary repatriations so to reap internal political benefits. German assets exhibited large spreads between their domestic and foreign prices, granting arbitrage profits to those who had forex access. New data reveals that spread dynamics were affected by the impact of capital controls on secondary markets.
Subjects: 
Sovereign risk
Capital controls
Elite capture
Germany
Nazi regime
Foreign debt
Secondary markets
JEL: 
E65
F38
H63
N24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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