This paper introduces a theoretical model to analyze the optimal bailout policy in an inter-connected banking system. The model intends to highlight two motivations behind providing a partial bailout to banks in distress: prevention of costly bankruptcies and prevention of financial contagion....

Two hypotheses are usually advanced to explain the East Asian twin financial and exchange rate crises in 1990's. The first, stresses market failure, namely the sudden shift in market sentiment that rapidly propagated itself regionally and which lead to financial turmoil. According to this view,...

Using a database of 189,000+ Colombian firms, I study the effect of CEOs' centrality and political connections on access to PAEF ("Programa de Apoyo al Empleo Formal"), a government bailouts program launched to subsidy wages in the first stages of COVID-19 crisis, and the ex-post economic...

Despite a formal 'no-bailout clause; we estimate significant net present value transfers from the European Union to Cyprus, Greece, Ireland, Portugal, and Spain, ranging from roughly 0.5% (Ireland) to a whopping 43% (Greece) of2010 output during the Eurozone crisis. We propose a model to analyze...

Despite a formal ‘no-bailout clause’, we estimate significant net present value transfers from the European Union to Cyprus, Greece, Ireland, Portugal and Spain, ranging from roughly 0.5% (Ireland) to 43% (Greece) of 2011 output during the recent Eurozone crisis. We propose a model to...

The novel coronavirus SARS-CoV-2 imposes the most unexpected external economic shock to modern humankind, triggering abrupt consumption and behavior pattern shifts around the world with widespread socio-economic impacts. In order to alleviate unexpected negative fallouts from the crisis,...