Can a negative shock to sovereign ratings invoke a vicious cycle of increasing government bond yields and further downgrades, ultimately pushing a country toward default? The narratives of public and political discussions, as well as of some widely cited papers, suggest this possibility. In this...

We investigate how output fluctuates before and after these financial crises hit the E-7 countries by excluding the crisis period defined earlier from the sample. The E-7 is referred to a group of seven emerging market countries-Thailand, Malaysia, Indonesia, the Philippines, South Korea, Mexico...

A growing literature stresses the importance of the “global financial cycle”, a common global movement in asset prices and credit conditions, for emerging market economies (EMEs). It is argued that one of the key drivers of this global cycle is monetary policy in the U.S., which is...