The Legacy and the Tyranny of Time: Exit and Re-Entry of Sovereigns to International Capital Markets

We use a continuous-time Weibull model (without and) with a change-point in duration dependence to investigate the duration of the exit and re-entry of sovereigns to international markets. We find that, as the reputation of debtor countries as good (bad) borrowers solidifies over time, those episodes are more likely to end-the "legacy of time." Debtor countries take advantage of the "benefit of doubt" of creditors during short exits. When exits are long and the reputation as a bad borrower emerges, no more "complacency" makes it more difficult to borrow again in international markets-the "tyranny of time."